Guoxin Securities·2025-06-16 11:41Report Industry Investment Rating There is no information provided in the report regarding the industry investment rating. Core View The report analyzes the situation of bank convertible bonds shrinking in the convertible bond market and explores possible bottom - position allocation ideas for convertible bond funds and other types of funds after the reduction of bank convertible bonds as large - cap bottom - position varieties. It provides suggestions for investors on how to choose bottom - position varieties based on the characteristics of convertible bond bottom - position varieties and market conditions [13]. Summary by Relevant Catalogs 1. Convertible Bond Bottom - Position Variety Overview - Pan - fixed - income + funds have a certain demand for convertible bonds. Convertible bond funds have an average convertible bond position of about 78%, and the convertible bond positions of first/second - level bond funds, balanced hybrid, and partial - debt hybrid funds are mostly maintained above 10% [1][15]. - At the industry level, public funds generally use convertible bonds from industries such as banks and power equipment as bottom - position varieties. Bank convertible bonds account for a large proportion in the convertible bond bottom - position varieties of public funds at all times, but the bottom - position varieties change with factors such as bond balance and market conditions [19][21]. 2. Overview of Bank Convertible Bonds - the "Major Holders" of Convertible Bond Bottom - Positions - Purpose of Issuance: Issuing convertible bonds is an important way for commercial banks to supplement core tier - 1 capital, and they need to achieve this through continuous conversion. Some bank convertible bonds have seen large shareholders convert at a premium to seize the opportunity to supplement core tier - 1 capital [2][28]. - Characteristics: Bank convertible bonds have high safety, can be pledged, and have high dividend yields of underlying stocks, almost no default risk, and strong anti - risk ability. They are also an important income - enhancement channel for stable accounts [2][33]. - Scale Trend: In recent years, there have been few bank convertible bond issuances, but the delisting rhythm has accelerated significantly. There are currently no new bank convertible bond issuances in the short term, and there are no new bank convertible bond pre - plans after the refinancing regulations [40][43]. 3. How to Allocate Subsequent Bottom - Position Varieties? - Characteristics of Convertible Bond Bottom - Position Varieties: Most bottom - position varieties have high ratings (AA and above), large market values (nearly 90% have a convertible bond balance of over 2 billion), and good anti - decline performance [3][46]. - Analysis of "Possible Bottom - Position Varieties": - Substituting with Other High - Rating Large - Cap Varieties: Such as photovoltaic convertible bonds. Although there are relatively limited eligible targets, and photovoltaic convertible bonds have been increasingly favored by funds in recent quarters, whether each high - rating large - cap bond can be used as a bottom - position still needs comprehensive consideration [52][56]. - Comparing with Public Fund Benchmarks: Considering currently under - allocated varieties. However, in practice, most public funds' performance benchmarks do not contain convertible bond - related indices, and the conversion premium rate may be a significant interference factor [57][62]. - Idea for Bottom - Position Selection: - For Convertible Bond Funds: Consider individual bonds with a positive YTM and good credit quality of underlying stocks. Also, construct a convertible bond portfolio with low or negative correlations among some individual bonds [66][67]. - For Non - Convertible Bond Funds: When it is difficult to find suitable bottom - position varieties in the convertible bond market, consider switching to other types of bonds [71][72].