Zhongtai Securities(SH:600918) ZHONGTAI SECURITIES·2025-07-24 15:37Core Insights - The report emphasizes the complexity of investing in local government bonds, highlighting the need to understand pricing logic, regional differences, and market dynamics [6] - The entry of more trading institutions, such as wealth management subsidiaries and public funds, has significantly improved the liquidity of local government bonds, especially in the second half of last year [6] - The report expresses a cautious outlook for pure bond investments in the fourth quarter, citing potential market adjustments and increased volatility risks due to liquidity pressures from wealth management products [7] Summary by Sections Fund Manager Profile - Li Yulu, the fund manager of Manulife Fund, has a decade of experience in fixed income and holds a master's degree in international banking and monetary economics from the University of Birmingham [6] - Li has previously worked in various roles related to credit analysis and investment management before joining Manulife in 2021 [6] Investment Strategy - The report discusses the current allocation strategy, focusing on convertible bonds primarily in the banking and aquaculture sectors, with a positive outlook on their performance due to low PB valuations [7] - It also mentions a portion of the portfolio allocated to environmental and state-owned enterprise reform themes, driven by strong government intentions to reduce debt [7] Market Performance - The report indicates a favorable view on the overall performance of fixed income products, particularly convertible bonds, which align with current market trends [8] - It notes that the median returns of primary and secondary bond funds are similar this year, but primary bond funds have experienced less drawdown, making them more attractive to certain investors [8] Sector Focus - The report highlights significant changes in the holdings of actively managed equity funds, with a decrease in large-cap stocks and an increase in positions in industry leaders within the AI hardware and communication sectors [11][12] - It points out that the non-bank financial sector has seen substantial increases in holdings, reflecting a recovery in valuations and performance expectations [13] Investment Recommendations - The report suggests focusing on four main investment themes: communication and hardware sectors benefiting from AI expansion, non-bank financials, new consumption trends in Hong Kong, and defense and military sectors [14]