1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report After a period of volatile market conditions, interest rates declined slightly in a narrow range this week, and institutional behavior stabilized overall, lacking a clear willingness to go long or short. Funds showed a more stable willingness to net - buy credit bonds than interest - rate bonds. The issuance of the first batch of tax - increased local bonds was smooth, and subsequent observation is needed to see if institutional bullish sentiment will increase [10]. 3. Summary by Relevant Catalogs 3.1 Overall Sentiment: Decline in Bond Market Vitality Index - As of August 8, the bond market vitality index decreased by 35 pcts to 14% compared to August 1, and the 5D - MA decreased by 19 pcts to 26%. Indicators of bond market vitality cooling include the decline in the trading volume of 10Y CDB active bonds/9 - 10Y CDB bond balance, the decrease in the inter - bank bond market leverage ratio, the change in the median duration of medium - and long - term pure bond funds, the decline in the implied tax rate of 10Y CDB bonds, and the decrease in the turnover rate of 30Y treasury bonds [1][11][13]. 3.2 Institutional Behavior: Bond Market Stabilized, Institutions Remained on the Sidelines 3.2.1 Buying and Selling Strength and Bond Selection: Light Trading of Interest - Rate Bonds, Continuous Net Buying of Credit Bonds by Funds - In the current bond market, the order of net - buying strength in the cash bond market is: funds > other product types > wealth management > insurance > overseas institutions and others; the order of net - selling strength is: joint - stock banks > city commercial banks > rural commercial banks > securities firms. For ultra - long bonds (bonds with a maturity of over 15 years), the order of net - buying strength is: funds > insurance > rural commercial banks > overseas institutions and others; the order of net - selling strength is: large - scale banks > joint - stock banks > other product types > city commercial banks > securities firms [23]. - Different institutions have different main bond types. For example, large - scale banks focus on interest - rate bonds within 1Y, 1 - 3Y, and 5 - 7Y; funds focus on certificates of deposit, credit bonds within 1Y, and 1 - 3Y credit bonds [2][28]. 3.2.2 Trading Portfolio: Slight Increase in Durations of Credit Bond Funds and Interest - Rate Bond Funds, Smaller Duration Adjustments for High - Performing Bond Funds - As of August 8, the mean and median durations of the full - sample medium - and long - term pure bond funds increased by 0.04 years and 0.03 years respectively compared to August 1, reaching 4.56 years and 4.42 years, at the 98.7% quantile over the past two years. Among them, the median durations of pure interest - rate bond funds, interest - rate bond funds, and credit bond funds increased by 0.06 years, 0.03 years, and 0.03 years respectively. High - performing bond funds had smaller duration adjustments [41][44]. 3.2.3 Allocation Portfolio: Wealth Management Extended Duration in the Secondary Market, Rural Commercial Banks and Insurance Deployed Ultra - Long Bonds - **Primary Market**: This week, the primary - market subscription demand for treasury bonds decreased, while that for policy - financial bonds increased. The weighted average full - coverage multiples of treasury bonds and policy - financial bonds changed accordingly [58]. - **Large - scale Banks**: As of August 8, the cumulative net - buying scale of 1 - 3Y treasury bonds this year was close to the same period last year. Although large - scale banks increased their net - buying of short - term treasury bonds since June, the cumulative net - buying scale was still lower than that in 2024 [66]. - **Rural Commercial Banks**: The cumulative net - buying scale of cash bonds by rural commercial banks this year was significantly weaker than in previous years, mainly due to the weak net - buying of short - term bonds within 1Y. However, the net - buying strength of 7 - 10Y and over - 10Y bonds was higher than in previous years [78]. - **Insurance**: The net - buying strength of cash bonds by insurance this year was significantly higher than in previous years, mainly due to the strong buying of ultra - long bonds over 10Y. As of August 8, the ratio of cumulative net - buying of cash bonds to cumulative premium income exceeded that at the end of August last year [86]. - **Wealth Management**: Since June, the cumulative net - buying scale of cash bonds by wealth management has continued to rise. This week, the duration of net - bought cash bonds in the secondary market decreased slightly but remained at a relatively high level since February 23, 2024 [95][97]. 3.3 Asset Management Product Tracking: More than Half of Credit Bond Funds Had Positive Returns in the Past Month - **Wealth Management**: As of the week of August 3, the wealth management scale decreased by 900 million yuan in August, far lower than the estimated value based on the average monthly growth rate in the past three years. The fixed - income wealth management products decreased by 1.99 billion yuan. The wealth management break - even rate increased [98]. - **Bond Funds**: Since August, the scale of bond funds increased by 3.83 billion yuan, higher than that of equity funds. The newly established bond funds this week had a relatively large scale, ranking second - highest this year. This week, the net values of all types of bond funds continued to rise, with credit bond funds performing better [109].

1. Report Industry Investment Rating There is no information provided in the text regarding the industry investment rating. 2. Core Viewpoints of the Report - Last week, the bond market experienced significant fluctuations, and institutional behavior adjusted accordingly. After a series of market movements, the "chasing up" behavior of trading desks became more cautious, and the allocation desks showed differentiation without forming a joint force [8]. - The bond market vitality index increased. As of August 1st, it rose by 13 pcts to 49% compared to July 25th, and the 5D - MA increased by 1 pct to 45% [1][9]. - In July, the increase in wealth management scale was significantly weaker than the seasonal average. The scale of bond funds also had a notable decline in its month - on - month growth rate, while the month - on - month growth rate of stock funds was larger [4]. 3. Summaries Based on Relevant Catalogs 3.1 Overall Sentiment: Bond Market Vitality Index Increase - The bond market vitality index is compiled based on the historical percentile levels of bond market leverage, turnover rate, bond fund duration, and the implied tax rate of government bonds since 2022 and their correlation with the bond market trend. As of August 1st, it rose by 13 pcts to 49% compared to July 25th, and the 5D - MA increased by 1 pct to 45% [9]. - Indicators of increasing bond market vitality include the trading volume of 10Y government bond active bonds/balance of 9 - 10Y government bonds, inter - bank bond market leverage, median duration of medium - and long - term pure bond funds, and 1 minus the implied tax rate of 10 - year government bonds. Indicators of decreasing bond market vitality include the turnover rate of 30Y government bonds [1][11][12]. 3.2 Institutional Behavior: After Repeated Market Fluctuations, Funds' Bullish Sentiment Became More Cautious 3.2.1 Buying and Selling Strength and Bond Selection - In the cash bond market last week, the order of net buying strength was: overseas institutions and others > other product types > insurance > wealth management > money market funds > funds. The order of net selling strength was: city commercial banks > joint - stock banks > securities firms > rural financial institutions. For ultra - long bonds (bonds with a maturity of over 15 years), the order of net buying strength was: insurance > wealth management > funds > other product types, and the order of net selling strength was: large - scale banks > joint - stock banks > city commercial banks > rural commercial banks > overseas institutions and others [19]. - Currently, the main bond types for various institutions are: large - scale banks focus on 3 - 5Y credit bonds; rural commercial banks focus on 3 - 5Y credit bonds; insurance focuses on 7 - 10Y interest - rate bonds; funds focus on 3 - 5Y interest - rate bonds; wealth management has no obvious main bond type; other product types focus on 7 - 10Y interest - rate bonds [2][24]. 3.2.2 Trading Desks: Interest - Rate Bond Funds Extended Duration, Credit Bond Funds Shortened Duration, and High - Performing Bond Funds Had Smaller Duration Adjustments - As of August 1st, the median duration of the full - sample medium - and long - term pure bond funds increased by 0.03 years to 4.39 years compared to July 25th. Among them, the median durations of pure interest - rate bond funds, interest - rate bond funds, and credit bond funds were 5.67 years, 5.43 years, and 3.95 years respectively, with changes of +0.98 years, +0.86 years, and - 0.47 years. The median durations of high - performing interest - rate bond funds and credit bond funds were 6.79 years and 4.75 years respectively, with changes of - 0.39 years and +0.19 years [2][41]. 3.2.3 Allocation Desks: Wealth Management Continuously Extended Duration, Rural Commercial Banks and Insurance Arranged Ultra - Long Bonds - In the primary market, the subscription demand for treasury bonds and policy - bank bonds increased last week. In the secondary market, large - scale banks' cumulative net purchase of 1 - 3Y treasury bonds this year was higher than the same period last year; rural commercial banks' cumulative net purchase of cash bonds this year was significantly weaker than in previous years, mainly due to the weak net purchase of short - term bonds within 1 year, but their net purchase of 7 - 10Y and over 10Y cash bonds was higher than the same period in previous years; insurance's net purchase of cash bonds and its ratio to premium income were significantly higher than in previous years, mainly because of the sufficient supply of ultra - long - term government bonds; wealth management continued to increase the duration of its net - purchased cash bonds in the secondary market, reaching the highest level since February 23, 2024 [3][55][79]. 3.3 Asset Management Product Tracking: The Increase in Wealth Management Scale in July Was Significantly Weaker than the Seasonal Average - In July, the increase in wealth management scale was weaker than the seasonal average. The actual month - on - month increase was 274.1 billion yuan, while the estimated increase based on the average month - on - month growth rate of the past four months was 1.87 trillion yuan. The month - on - month growth rate of bond fund scale declined significantly in July, while that of stock funds was larger. Last week, the net value of various types of bond funds increased significantly, but they still recorded overall negative returns in the past month [4][90][98].

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report Under the resonance of multiple negative factors such as the rise in risk preference, the sharp rise in the equity and commodity markets, and the central bank's net withdrawal in the open - market operations disturbing the capital price, the bond market fluctuated violently this week. The selling behavior of funds is particularly worthy of attention. The scale of funds' net selling on Thursday and Friday was second only to the redemption tides in late August and early October last year. The performance of bond funds was poor, with over 40% of pure interest - rate bond funds recording negative returns in the past three months. Continued attention should be paid to changes in market risk preference and fund redemption situations [10]. 3. Summary According to Relevant Catalogs 3.1 Overall Sentiment - The bond market vitality index increased, mainly due to the rise in the turnover rate of ultra - long bonds. As of July 25, the bond market vitality index rose 6 pcts to 37% compared with July 18, and the 5D - MA rose 5 pcts to 45% [11]. - Indicators of rising bond market vitality included the trading volume of the active 10Y CDB bond / the balance of 9 - 10Y CDB bonds (the rolling two - year quantile rose from 42% to 72%), the 30Y treasury bond turnover rate (the rolling two - year quantile rose from 16% to 71%), and the median duration of medium - and long - term pure bond funds (the rolling two - year quantile rose from 99.3% to 99.7%) [13]. - Indicators of falling bond market vitality included the excess level of the inter - bank bond market leverage ratio compared with the average of the past 4 years (the rolling two - year quantile dropped from 20% to 5%) and the implied tax rate of 1 - 10Y CDB bonds (the rolling two - year quantile dropped from 57% to 21%) [14]. 3.2 Institutional Behavior 3.2.1 Buying and Selling Strength and Bond Selection - In terms of overall buying and selling strength, the order of net buying strength in the cash bond market this week was large banks > insurance > wealth management > other products > money market funds > overseas institutions and others, and the order of net selling strength was funds > securities firms > joint - stock banks > city commercial banks. For ultra - long bonds, the order of net buying strength was insurance > rural commercial banks > city commercial banks > wealth management, and the order of net selling strength was funds > securities firms > large banks > joint - stock banks > other products [22]. - Different institutions had different main bond types. Large banks focused on 1 - 3Y interest - rate bonds and credit bonds; rural commercial banks focused on 5 - 10Y interest - rate bonds and 1 - 3Y other bonds; insurance focused on interest - rate bonds over 10Y and 7 - 10Y credit bonds; funds focused on interest - rate bonds within 1Y; wealth management focused on certificates of deposit and interest - rate bonds within 3Y; other products focused on certificates of deposit [26]. 3.2.2 Trading Portfolio - As of July 25, the median duration of the full - sample medium - and long - term pure bond funds increased by 0.21 years to 4.38 years compared with July 18. Among them, the median durations of pure interest - rate bond funds and interest - rate bond funds decreased by 0.22 years and 0.04 years respectively, while that of credit bond funds increased by 0.19 years. The median durations of high - performing interest - rate bond funds and credit bond funds changed more significantly, decreasing by 0.48 years and increasing by 0.32 years respectively [35]. 3.2.3 Allocation Portfolio - **Primary market**: The primary subscription demand for treasury bonds and policy - bank bonds decreased overall this week. The weighted average full - market multiples of treasury bonds and policy - bank bonds decreased from 3.25 times to 2.94 times and from 3.36 times to 3.16 times respectively [53]. - **Large banks**: As of July 25, the cumulative net purchase of 1 - 3Y treasury bonds this year reached 4032 billion yuan, higher than the same period last year [59]. - **Rural commercial banks**: This year, the cumulative net purchase of cash bonds was significantly weaker than in previous years, mainly due to the weak net purchase of short - term bonds within 1Y. However, the net purchase of 7 - 10Y and over 10Y cash bonds was higher than the same period in previous years [70]. - **Insurance**: This year, the net purchase of cash bonds and its ratio to premium income were significantly higher than in previous years, mainly due to the sufficient supply of ultra - long - term government bonds. As of July 25, the ratio of the cumulative net purchase of cash bonds to the cumulative issuance of government bonds over 10Y was 27.34%, lower than 35.14% at the end of July last year [81]. - **Wealth management**: From June to July, the cumulative net purchase of cash bonds continued to rise, especially for bonds over 10Y. This week, the duration of net - bought cash bonds in the secondary market increased to the highest level since February 23, 2024 [90]. 3.3 Asset Management Product Tracking - Since July, the increase in the scale of wealth management products was weaker than seasonal. The scale increased by 27.96 billion yuan, far lower than the same period from 2021 - 2024. The wealth management product break - even rate decreased [94]. - Since July, the scale of bond funds increased by 13.41 billion yuan, with a significant slowdown in growth rate, while the scale of equity funds increased by 20.99 billion yuan. This week, the net value of various types of bond funds fell sharply, and over 40% of pure interest - rate bond funds recorded negative returns in the past three months [101].