China Life Insurance disclosed on July 20 that eight of its asset-management accounts had sold about 1.1097 million shares of GigaDevice Semiconductor Inc. for roughly 682 million yuan, in a trade completed on July 8 at prices ranging from 611.46 yuan to 624.61 yuan per share.
The sale landed after a violent pullback in one of the most sought-after memory-chip names in China’s A-share market. GigaDevice, listed in Shanghai as 603986.SH, had risen from about 55 yuan in 2024 to an intraday record of 843.38 yuan on July 1, 2026, a gain of nearly 14 times in roughly two and a half years.
China Life, listed as 601628.SH, said stock purchases and sales by its equity managers in the secondary market are routine investment actions based on allocation needs.
The sale came after a sharp reversal in GigaDevice
On June 29, GigaDevice issued a trading-risk alert saying its share price had risen sharply over a short period and could face the risk of a rapid pullback. After hitting its July 1 peak, the stock fell for six straight trading sessions. By the close on July 8, it had dropped to 603.17 yuan, down about 30% from the high.
That was the point at which the eight China Life asset-management accounts completed their exit. Looking at the move in hindsight, the timing stood out even more: by July 20, GigaDevice had closed at 432.30 yuan, leaving the stock close to halving from the peak.
The article argues that, measured by neutral portfolio-management standards, the trade did not look like a rushed decision.
A reduction in one stock, a 10 billion yuan-plus net buy on the same day
China Life announced another move on the same day. Its asset-management unit, Guoshou Asset, said it recorded more than 10 billion yuan of net purchases in A-share equities and listed and over-the-counter equity funds in a single day. The money went into broad-based ETFs and key areas tied to the modern industrial system and new quality productive forces.
Guoshou Asset described the move as a concrete step to “seize strategic allocation opportunities and increase equity asset allocation.”
China Life was not alone. The article said five major insurers, including PICC, Ping An Insurance, China Pacific Insurance and New China Life Insurance, also voiced support for the capital market.
Earlier the same day, China Chengtong said it had cumulatively bought nearly 10 billion yuan in stock assets. China Reform Holdings said it had used more than 50 billion yuan from special relending for share buybacks and stake increases, together with matching funds, to support market stability.
Seen only through the lens of July 20, cutting GigaDevice and joining broader market-support purchases may look contradictory. Over a longer 2026 first-half timeline, the article says, the picture looks much more coherent.
Small in the context of China Life’s overall portfolio
The GigaDevice transaction was not large relative to China Life’s overall investment book, which the article described as being in the trillions of yuan. As of the end of the first quarter of 2026, none of the eight asset-management accounts appeared among GigaDevice’s top 10 circulating shareholders.
Of the eight accounts, seven were set up in cooperation with China Universal Asset Management, while one was established with China Asset Management. The mandates covered both balanced and growth styles. The underlying account types included a traditional account, a universal life Account A, a universal life Account B and a participating account.
The article cited unnamed industry participants as saying that this kind of coordinated action across different accounts and strategies has the hallmarks of a systematic portfolio rebalance.
In insurance portfolio management, when a stock’s price surge pushes its weight above a preset range, selling to restore the target allocation is a routine discipline. In that reading, the GigaDevice disposal looks less like a directional call and more like a rules-based rebalance triggered by price action.
Tactical profit-taking at the portfolio level and strategic equity accumulation at a broader level can sit inside the same investment framework.
China Life’s earnings surge in the second quarter
On July 14, China Life issued a first-half earnings preannouncement, estimating attributable net profit at about 128.933 billion yuan to 137.119 billion yuan, up 215% to 235% from a year earlier.
For the second quarter alone, attributable net profit was estimated at about 109.4 billion yuan to 117.6 billion yuan, up 802% to 870%. In the first quarter, by contrast, attributable net profit came in at 19.505 billion yuan, down 32.3% year on year.
The article tied that reversal largely to an extreme, tech-led structural rally in the second quarter. The STAR 50 Index rose 75.74% in the quarter, leading the domestic market, while the ChiNext Index gained 36.35%. The semiconductor supply chain was at the center of that move.
Under the new accounting standards, a large amount of equity assets is measured at fair value with changes flowing through current profit and loss. That meant the surge in technology shares translated directly into reported earnings. China Life itself attributed the jump in profits to “continued optimization of asset allocation” and “steady progress in the layout of areas such as new quality productive forces, delivering solid investment results.”
Honghu Fund offered another example of positioning shifts
The article pointed to Honghu Fund as evidence that tactical execution and long-term conviction can move together. Honghu was jointly established by China Life and New China Life Insurance, each contributing 50%. The combined size of its three products has reached 92.5 billion yuan.
In the first quarter of 2026, Honghu funds rebalanced in sync, cutting cyclical names such as Shaanxi Coal Industry and adding consumer and financial leaders including Kweichow Moutai, Wuliangye and Industrial and Commercial Bank of China.
The piece described that structure as a barbell strategy: high-dividend assets on one side as the core holding, and high-quality growth names on the other to add upside. Pulling money out of assets seen as overvalued or carrying accumulated risk, then reallocating into targets with more reasonable valuations and long-term value, was presented as part of China Life’s patient-capital approach.
Rebalancing is standard practice among global long-term investors
The article widened the frame well beyond one insurer and one stock. For insurance capital, rebalancing is a regular review conducted under an overall asset-allocation framework. When a position’s market value rises so much that it drifts beyond the target band, selling to restore the preset ratio is common practice.
In early July this year, BlackRock Chief Investment Officer Rick Rieder told CNBC that the firm had trimmed some companies with high direct exposure to artificial intelligence and carried out portfolio rebalancing. He said portfolio adjustments are continuous and aimed at optimizing risk-adjusted returns.
As of March 31, 2026, BlackRock’s assets under management reached a record $13.9 trillion. The article cited BlackRock research as showing that in volatile markets, active rebalancing every quarter or every half year produces better long-term results than simply holding positions unchanged.
Vanguard was cited as another example. Founded by John Bogle in 1974, Vanguard had $12.5 trillion in global assets under management as of Feb. 28, 2026, served more than 50 million investors, operated in more than 160 countries and maintained 17 offices worldwide.
According to the article, Vanguard places rebalancing among the seven modules that create value in its adviser alpha model. By selling assets that have risen more and buying assets that have fallen, rebalancing can create close to 0.3% in excess return a year.
Using the classic 60% equity and 40% bond portfolio, Vanguard also found that from 1960 to 2023 an annually rebalanced 60/40 portfolio delivered an annualized return of 8.90%, below the 9.57% generated by letting the portfolio drift without rebalancing. But annualized volatility fell sharply, from 14.22% to 11.38%. The trade-off was less than 0.7 percentage point of annual return for a significant reduction in risk.
The article’s conclusion on that point was direct: the main purpose of rebalancing is to align portfolio risk with the investor’s risk tolerance. Long-run testing and back-testing do not point to one universally best rebalancing method, but they do support the value of sticking with a consistent and systematic discipline.
From sovereign wealth to public pensions
Like BlackRock and Vanguard, traditional pension funds also use long-only strategies. The article argued that their rebalancing activity is not, at its core, a bearish call on any asset class. It is a way to pull a drifting portfolio back onto its strategic track.
Norway’s Government Pension Fund Global, or GPFG, was used as a case in point. As of the end of June 2026, the fund’s market-estimated size stood at about 20.147 trillion Norwegian kroner, or about $1.9 trillion. It invests across more than 70 countries and regions and holds around 9,000 listed companies.
Under rules set by Norway’s Ministry of Finance, rebalancing is triggered when the actual equity share in the benchmark index deviates beyond a specified number of percentage points from the strategic benchmark weight.
In the fourth quarter of 2013, a sharp rise in global equities pushed the fund’s stock allocation close to the then regulatory ceiling of 64%, prompting GPFG to rebalance by selling shares worth 150 billion Norwegian kroner. During the 2020 pandemic selloff, when the equity weight fell below the target band, the fund bought stocks aggressively against the trend.
The article quoted GPFG chief Nicolai Tangen describing the philosophy this way: selling bonds and buying stocks happened “not because of judgment, but because the rules required it.” The piece said that discipline helped the fund deliver compounded annual returns of 6% to 7% over three decades.
The California Public Employees’ Retirement System, or CalPERS, was cited as another example of institutions rethinking rebalancing and asset-allocation methods. The article said CalPERS was the largest public pension fund in the U.S., with about $625.7 billion in assets at the end of 2025.
In November 2025, the CalPERS board decided to abandon its long-used strategic asset allocation framework and adopt a Total Portfolio Approach, or TPA, with formal implementation on July 1, 2026. Under the new framework, the fund shifted from 11 separate asset-class benchmarks to a single reference portfolio made up of 75% equities and 25% bonds.
After the reform, the fund no longer aimed to hit a preset target weight for each asset class on its own. It began managing the entire fund as one integrated portfolio, balancing total risk, return and liquidity together. The article described the change as a move away from siloed management based on multiple category benchmarks toward integrated portfolio management focused on the overall optimum.
One framework, different layers of action
The article’s central point is that selling a single stock after a huge run and buying into the broader equity market are not necessarily conflicting decisions. Markets cannot be predicted with certainty, but risk can be managed by rebalancing a portfolio back toward its intended path.
Viewed that way, China Life’s reduction in GigaDevice was a stock-level execution of discipline after a major rally had altered portfolio weights. Its more than 10 billion yuan net purchase of ETFs and other equity assets represented a separate, broader allocation decision tied to strategic exposure.
The original article was published on the WeChat account “Alpha Workshop Financier” and credited to the author Jin Meimei.