(Yicai Global) Jan. 25 -- Stock holdings among China's five state-backed mutual funds fell in the fourth quarter of last year to their lowest levels, while the performance of large-cap A-shares continued to rise.

The funds, set up during the 2015 stock market crash to promote market stability, reduced their proportions of stock value compared to net assets to 19.14 percent, 40.68 percent, 9.28 percent, 24.21 percent and 7.46 percent, respectively, reported Chinese financial researcher Wind Info citing official fund reports.

A-share equity positions among the funds had remained generally stable from mid-2016 to mid-2017, with an average position of 35 percent to 40 percent at the end of the second quarter last year. By the end of last year, the average position had fallen to 18 percent.

One fund, which has held the highest equity position among the funds since their inception, reported a holding of 40.68 percent as of the end of the year, down 30 percentage points compared to the end of the second quarter.

The annual reports show that funds generally reduced exposure to sharply rising stocks. One fund slashed its equity in its top three holdings, namely, Gree Electric Appliances Inc. of Zhuhai [SHE:000651], Inner Mongolia Yili Industrial Group Co. [SHA:600887] and Midea Group Co. [SHE:000333], to the extent that they fell out of its ranking of top ten listings.

Several stocks, which were slashed in national fund portfolios, have seen significant increase since the start of this year. For example, Gree Electric registered rose nearly 30 percent earlier this month. However, overall investment performance of the state-backed mutual funds has been good since. Since they were set up with a scale of about CNY40 billion and CNY200 billion in total, the value of each has increased to more than CNY250 billion, achieving a 25 percent return on investment.

"We do not know specific operations the state mutual funds. However, we believe that these funds pursue absolute returns. They have high demands for funds' safety, rather than high-profit expectations. Their role, on the one hand, is to stabilize the market, and on the other hand, is to pursue steady appreciation of assets," a large public fund manager in Shanghai told Yicai Global.