Can Investors Claim Compensation for a 40% Fund Loss? Golden Eagle Fund's Han Guangzhe Stumbles on New Energy and AI — Lawyer Explains Paths for Investor Rights Protection

When a fund loses 40%, do investors have no choice but to accept the loss?

Recently, Han Guangzhe, a fund manager at Golden Eagle Fund, has sparked heated market discussion as his managed products saw a maximum drawdown of nearly 40% due to heavy positions in the new energy and AI sectors. Some investors have complained on social media platforms about "losing their shirts," while others have questioned whether the fund manager engaged in issues such as chasing gains and cutting losses, or style drift. According to Wind data, multiple funds managed by Han Guangzhe have ranked at the bottom in performance over the past two years, with some products seeing their net asset value cut in half.

Public offering funds, as inclusive financial products, carry the wealth dreams of hundreds of millions of investors. However, the legal issues behind fund losses cannot be ignored: does a fund manager's decision-making error constitute dereliction of duty? Can investors hold fund managers accountable under the Securities Investment Fund Law or the Civil Code? This article will, from a legal practice perspective and in light of recent judicial precedents, map out the rights-protection pathways and risk boundaries for affected investors.

I. Fund Managers' "Fiduciary Duty": How Does the Law Define Responsibility?

Article 9 of the Securities Investment Fund Law expressly stipulates that fund managers, when managing and utilizing fund property, shall faithfully perform their duties and fulfill the obligations of honesty, credibility, prudence, and diligence. This means that fund managers owe a "fiduciary duty" to fund holders, and their investment decisions must be based on maximizing the interests of holders, rather than personal performance rankings or short-term speculation.

However, in judicial practice, the standard for determining "diligence and responsibility" is highly flexible. In a fund compensation case heard by a court in Beijing in 2023, investors claimed that the fund manager's frequent position adjustments and chasing of market hotspots caused losses. The court ultimately held that as long as the manager's investment conduct fell within the investment scope and strategy stipulated in the fund contract, and no illegal circumstances such as benefit transfer or insider trading were found, it generally would not constitute a breach of contract. Conversely, if a fund manager unilaterally changes the investment style—for example, claiming value investing while heavily holding theme stocks—it may be found to constitute a breach of contractual obligations.

In the case of Han Guangzhe, investors need to focus on verifying whether the investment scope in the fund contract covers AI and new energy, and whether the changes in holdings violate the contract terms. If the contract explicitly states "conservative" or "balanced" risk profiles, but the actual positions are concentrated in high-volatility sectors, there is room for legal recourse.

II. Three Avenues for Loss Claims: Breach of Contract, Tort, and Administrative Reporting

### 1. Contract Claim: Seeking Damages for Breach of Contract

A fund contract serves as the legal bond between investors and fund managers. If a manager violates the investment strategy, position limits, or risk control clauses stipulated in the contract, investors may assert claims for breach of contract under Article 577 of the Civil Code. However, the difficulty in such litigation lies in the fact that fund contracts typically grant managers considerable discretionary authority, and courts tend to adopt a conservative approach in determining what constitutes a "breach."

### 2. Tort Action: Proving "Causation" Is Key

Investors may also rely on Article 88 of the Securities Law to assert that the fund manager breached its duty of care, constituting a tort. However, tort liability requires a direct causal relationship between the loss and the conduct. Since the decline in fund net value is influenced by overall market movements, investors must provide evidence proving that the losses primarily resulted from the manager's improper conduct rather than systemic risk. For example, if the average decline of comparable funds during the same period was only 10%, while this fund declined by 40%, it may constitute preliminary evidence that the manager's decision-making involved gross negligence.

### 3. Administrative Reporting: Filing Complaints with the CSRC and the Asset Management Association of China

Investors may also report fund managers' violations to the CSRC or its local offices. If issues such as interest transfer, rat trading, or false advertising are verified, regulatory authorities may impose administrative penalties on the manager. In 2024, the CSRC fined a fund company for investment process violations and ordered it to compensate some investors for their losses. Although administrative complaints cannot directly result in compensation, they can serve as strong evidence in civil litigation.

III. "Difficulty in Providing Evidence" and "Low Win Rate" in Judicial Practice

As of 2025, publicly accessible cases of fund investors winning lawsuits are few and far between. The case of "Zhang v. a fund company," heard by the Shanghai Financial Court in 2022, had raised high hopes, but the court ultimately dismissed the claims on the grounds that the plaintiff failed to prove that the fund manager's investment conduct violated the contract or the law. Similar judgments have been fairly common across courts nationwide, reflecting the judiciary's respect for the professional nature of fund investment, as well as the problem of the excessive burden of proof placed on investors.

However, there have also been breakthrough precedents in recent years. In 2024, an intermediate court in Guangdong ruled that a fund company should compensate investors for 20% of their losses, on the grounds that the fund had promised "stable returns" in its promotional materials but actually invested in high-leverage derivatives, and the court determined this constituted fraudulent marketing. This case offers a new approach for investors seeking to protect their rights: focusing on misleading conduct at the sales stage, rather than only on the investment side.

4. How can ordinary investors use legal tools to protect themselves?

### 1. Prevention in Advance: Carefully Read the Contract and Promotional Materials

Before purchasing a fund, an investor should focus on reviewing clauses in the fund contract such as investment scope, risk level, and performance benchmark, and retain evidence such as promotional materials and sales chat records. If sales personnel make oral promises of "guaranteed principal" or "high returns," the investor may rely on the Minutes of the National Courts' Civil and Commercial Trial Work Conference to assert that the sales institution bears liability for breaching the suitability obligation.

### 2. Post-Incident Rights Protection: Timely Evidence Collection and Professional Assistance

If the fund has already incurred significant losses, investors should promptly organize materials such as trading records, fund net value trends, and public statements by fund managers, and consult a professional lawyer to assess the likelihood of winning a lawsuit. The lawyer will help analyze the fund contract terms, whether the manager's investment conduct violated fiduciary duties, and whether there are actionable grounds such as false advertising.

### 3. Class Action: Joining Forces to Protect Rights and Reduce Costs

Individual investors face limited claim amounts and high litigation costs. Affected fund holders are advised to unite and jointly retain lawyers to initiate collective litigation or test-case litigation. The newly revised Civil Procedure Law in 2025 has improved the representative action system, providing a more convenient procedural path for protecting fund investors' rights.

Five, Lawyer's Advice: Protect Your Rights Rationally and Act Within Your Means

The case of Han Guangzhe at Golden Eagle Fund serves as a warning once again: fund investment is not a guaranteed profit, and investors need to develop risk awareness. When facing losses, one should not blindly follow the crowd in filing complaints, but rather rationally assess the legal basis. If rights protection is truly necessary, it is advisable to entrust a professional lawyer familiar with the financial and securities field to conduct a feasibility analysis of the case.

Guangdong Zhiming Law Firm has long focused on the protection of financial consumers' rights and interests, accumulating extensive experience in handling disputes in areas such as funds, trusts, and insurance. We can provide damaged investors with full-process services including legal consultation, evidence organization, and litigation representation, helping you secure maximum rights and interests in complex legal proceedings.

Investment carries risks, and rights protection requires rationality. Regardless of the path chosen, the law is always the last line of defense in protecting investors' right to fair trading.