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(Bloomberg) -- A manager of a $3.4 billion Chinese equity fund that’s outperformed virtually all of its peers in 2025 expects a turnaround in consumer confidence will further boost domestic shares.

Cashed-up households and Beijing’s pledge to support consumption should propel stocks even higher once sentiment picks up, according to Fidelity International’s Hyomi Jie. Internet giant Alibaba Group Holding Ltd. and sportswear maker Anta Sports Products Ltd. are among top holdings in her Fidelity Funds - China Consumer Fund, which has beaten 99% of its peers this year with a 16% return.

Anemic consumer spending in the world’s No. 2 economy has been largely driven by weak sentiment, rather than a lack of funds, so “when consumer confidence improves, spending will increase and support the overall sentiment toward broader Chinese markets,” she said.

While the nation’s shares have outpaced most regional peers in 2025 thanks to a DeepSeek-fueled surge in tech stocks, more sectors are starting to participate in the rally. The MSCI China sub-index of consumer discretionary shares is the second-best performing sectoral gauge next to its tech counterpart, jumping about 27% this year.

The equity market’s gains also coincide with Beijing’s efforts to ramp up consumption. With a volley of subsidies and elevated household savings, more people appear ready to open their wallets. The improving outlook for consumers is already showing up in data, with retail sales growth picking up more than forecast in the first two months of the year.

Jie, who’s based in Singapore, is especially bullish on China’s sportswear industry and has been investing in Anta since taking over the portfolio in 2020. The stock is up 11% this year.

“The sportswear industry in China is one of the largest and fastest growing in the world, driven by the presence of a large millennial population, and increasing focus on healthy lifestyles,” she said. The company is well-positioned to gain from its “strategy to develop different brands to satisfy different demands” at various price points.

She also owns shares of Temu parent PDD Holdings Inc. and gaming company NetEase Inc. While the fund has outrun rivals in 2025, it isn’t performing as well on a three- to five-year basis, according to data compiled by Bloomberg.

More than a quarter of her fund’s holdings are artificial intelligence infrastructure names, including Tencent Holdings Ltd. and Baidu Inc. Jie said they’re key beneficiaries of the recent AI development spurred by DeepSeek’s cost-effective model.

“DeepSeek’s breakthrough was born of constraint,” she said. “The efficiency gains are very significant and will extend across multiple sectors.”