1. Report Industry Investment Rating - No industry investment rating information is provided in the report. 2. Core Viewpoints of the Report - The current strategy for credit bonds is to focus on coupon hunting, which is superior to the duration strategy. The main areas for exploration include medium - and low - quality urban investment bonds and some entities with a large convexity in the yield curve [5][8]. 3. Summary According to the Table of Contents 3.1 Credit Bond Weekly Viewpoint - The bond market was dull last week, lacking a trading theme. Credit bonds showed a hesitant performance, and the previous downward trend in yields paused. Looking ahead, positive factors for credit bonds include the concentrated opening period of amortized - cost - based open - end bond funds, stable liquidity, and the approaching time for year - end allocation to build coupon positions for the next year. Negative factors include the halt of the rapid decline in yields, a continuous drop in turnover rate, the uncertainty of the public - offering fee regulation, and potential disturbances from the stock market [5][8]. 3.2 Credit Bond Weekly Review 3.2.1 Negative Information Monitoring - There were no cases of bond defaults and overdue, no enterprises with their main ratings or outlooks downgraded, and no bonds with their debt ratings lowered from November 10 to November 16, 2025. However, several companies had significant negative events, such as Shaanxi Tourism Group Co., Ltd. receiving a warning from the inter - bank market, and many companies facing issues like debt defaults, regulatory warnings, and restrictions on high - consumption of their legal representatives [11][12]. 3.2.2 Primary Issuance - Issuance volume remained high, but the maturity volume increased significantly, leading to a reduction in net financing. From November 10 to November 16, credit bond primary issuance was 269.9 billion yuan, a 7% decrease from the previous period. The total repayment amount rose to 238.5 billion yuan, resulting in a net inflow of 31.4 billion yuan. The cost of primary issuance continued to narrow slightly, with the AA + level showing a more significant reduction. The average coupon rates for AAA and AA + were 2.10% and 2.15% respectively, with the former increasing by 1bp and the latter decreasing by 11bp [12][13]. 3.2.3 Secondary Trading - The valuations of credit bonds with various ratings and tenors fluctuated within a narrow range. Only low - grade and long - term bonds showed a slight narrowing. Credit spreads remained flat in the short term and widened passively in the medium - and long - term. The turnover rate continued to decline, dropping 0.18 percentage points to 1.69%. The spreads of most industries widened by 1bp, while the real - estate industry's spreads narrowed by 2bp. Among real - estate enterprises, the spreads of Times Holdings, Rongqiao, Vanke, and Yuzhou Hongtu widened the most [5][17][24].

Summary of the Conference Call on Bond Market Investment Strategy Industry Overview - The focus is on the bond market, specifically the investment strategies for November 2025, highlighting a strong but limited downward movement in bond prices with low risk [1][4]. Key Points and Arguments - **Economic Expectations**: Investors have high expectations for a strong economic start in the coming year, supported by positive developments in US-China trade negotiations and potential recovery in PMI data [1][3]. - **Interest Rate Trends**: The ten-year government bond yield needs more favorable conditions to effectively drop below 1.7%. Current conditions show a 7,000 fund level around 1.4, indicating a loose but not extremely low liquidity environment [2][3]. - **Duration Strategy**: It is recommended to maintain a neutral to slightly high duration strategy in November, focusing on opportunities to compress spreads, particularly in 30-year non-active bonds, 50-year government bonds, and 5-10 year active government bonds [5][11]. - **Short-term vs Long-term Bonds**: Short-term certificates of deposit are not cost-effective, while short-term government bonds are less likely to decline due to central bank purchases. If short-term rates continue to decline, a bullet strategy is preferred; if rates fluctuate, a balanced approach between bullet and barbell strategies is suggested [6][10]. - **Central Bank Actions**: The central bank restarted government bond trading to stabilize the balance sheet and as a long-term liquidity tool. This move is crucial given the declining balance of central government debt from January to September [7][8]. - **Government Bond Supply**: Although the net financing scale of government bonds in Q4 is lower than last year, it is still significant, necessitating central bank cooperation. The expected net financing scale for November to December is approximately 1.7 trillion, lower than last year's nearly 3 trillion [9][10]. - **Future Monetary Policy**: There is a high probability of interest rate cuts next year, although the likelihood of cuts within the year is low. The central bank may adopt a more flexible approach to reserve requirement ratio adjustments based on market conditions [10][12]. - **Investment Recommendations**: For 10-year government bonds, the new bond 220 is less attractive compared to the main bond 215 due to its small issuance scale. Recommendations include focusing on high-value long-term bonds such as the 30-year and 50-year government bonds [11][12]. - **Floating Rate Bonds**: Floating rate bonds benefit from declining short-term rates, but many are currently overpriced. Investors are advised to selectively focus on specific floating rate products [13]. - **Bond Futures Strategies**: The December contract IR2 is at a high level, suggesting effective hedging strategies using bond futures. Specific analysis is required for different contracts during the November rollover [14]. Other Important Insights - The overall bond market is expected to remain strong with limited downside risk, indicating a cautious but optimistic outlook for investors [4]. - The central bank's actions are crucial for maintaining liquidity and supporting the bond market amid fluctuating economic conditions [8][10].

Group 1: Quantitative Credit Strategy - The urban investment bond duration strategy balances returns and defensiveness well, with cumulative excess returns for perpetual bonds, secondary bonds, and urban investment barbell combinations reaching 18.5bp, 14.7bp, and 5.1bp respectively [2][12] - Most medium to long-term strategies have shown excess returns in the past month, indicating potential profit from recent upward trends, although the likelihood of volatility corrections is higher compared to other strategies [2][12] Group 2: Duration Tracking - As of October 24, 2025, the weighted average transaction durations for urban investment bonds and industrial bonds are 1.98 years and 2.42 years, respectively, returning to over 80% of the high historical percentile since 2021 [3][15] - The weighted average transaction durations for secondary capital bonds, perpetual bonds, and general commercial bank bonds are 4.01 years, 3.46 years, and 1.83 years, with secondary capital bonds showing a relatively high duration percentile [3][15] Group 3: Yield Heatmap - As of October 27, 2025, the valuation yields and spreads of private enterprise industrial bonds and real estate bonds are generally higher than other varieties [4][17] - In the non-financial and non-real estate industrial bonds, yields have generally declined, with the average drop exceeding 6bp for 2-5 year state-owned enterprise private perpetual bonds [4][18] Group 4: Science and Technology Innovation Bonds - The issuance of science and technology innovation bonds reached a year-to-date high, with a total issuance scale of 699.4 billion yuan from October 20 to October 24, 2025, including 421.4 billion yuan from the exchange [5][20] - The subscription enthusiasm for new bonds has increased, with several science and technology bonds being oversubscribed by more than three times, indicating strong institutional demand for quality science and technology bonds [5][20] Group 5: Local Government Bonds - From October 20 to October 24, 2025, local government bonds issued totaled 247.2 billion yuan, including 112.4 billion yuan of new special bonds and 65.1 billion yuan of refinancing special bonds [6][23] - The main investment areas for special bond funds are "special new special bonds" and "ordinary/project income," with 73 billion yuan of special refinancing special bonds issued in October, accounting for 9.3% of the month's local bond issuance [6][23]

Core Insights - The article discusses investment strategies focusing on various government bonds, particularly highlighting opportunities in 30-year non-active bonds, 50-year bonds, and 5-10 year active bonds [1] Group 1: Investment Strategies - The article suggests monitoring the yield spread strategies for 30-year non-active bonds, 50-year bonds, and 5-10 year active bonds [1] - It recommends considering long-end credit configurations and waiting for a 5 basis point adjustment before making duration strategy decisions [1] - The 10-year government bond spread between 250016 and 250011 is currently around 5 basis points, with expectations of potential compression to 3 basis points under optimistic conditions [1] Group 2: Market Performance - As of October 30, 2025, the 5-10 year government bond active index (H21018) increased by 0.05%, while the government bond ETF for the same duration rose by 0.07%, marking three consecutive days of gains [1][2] - The 5-10 year government bond ETF reached a new high in scale at 1.589 billion yuan [3] - The ETF's latest share count reached 13.5325 million, also a six-month high, with a net inflow of 17.6132 million yuan [4] Group 3: Historical Performance - Over the past five years, the 5-10 year government bond ETF has seen a net value increase of 21.60%, ranking 34 out of 179 in index bond funds, placing it in the top 18.99% [4] - The ETF has a historical maximum monthly return of 2.58% and a longest consecutive monthly gain of 10 months, with a total gain of 5.81% [4] - The ETF has a 100% probability of profitability over three years, with a monthly profitability probability of 70.87% [4] Group 4: Risk and Fees - The maximum drawdown for the ETF over the past six months was 1.09%, with a relative benchmark drawdown of 0.46% [5] - The management fee for the ETF is 0.15%, and the custody fee is 0.05% [6] Group 5: Tracking Accuracy - The ETF has a tracking error of 0.028% over the past month, closely following the 5-10 year government bond active index [7]

Group 1: Quantitative Credit Strategy - The duration strategy has continued to perform poorly as of September 30, with the cumulative excess return of the AA+ city investment bonds in a barbell strategy dropping to around -34 basis points [2][12] - The duration strategy for perpetual bonds has shown significant volatility, with cumulative excess returns remaining low at -18 basis points and -30 basis points despite a larger recovery after declines in September [2][12] - In contrast, short-end city investment bonds and bullet-type commercial bank bonds have shown relatively better excess returns [2][12] Group 2: Duration Tracking of Various Bonds - As of September 30, the weighted average transaction durations for city investment bonds and industrial bonds are 1.76 years and 2.22 years, respectively, indicating a defensive characteristic and falling within the 65%-80% historical percentile range since 2021 [3][16] - The weighted average transaction durations for secondary capital bonds, perpetual bonds, and general commercial bank bonds are 3.67 years, 3.70 years, and 1.92 years, respectively, showing a notable decline in their percentile levels [3][16] - Other financial bonds, such as securities company bonds and insurance company bonds, have also shown low historical duration percentiles, with durations of 1.51 years, 1.73 years, 4.11 years, and 1.23 years [3][16] Group 3: Yield Heatmap of Coupon Assets - As of September 29, 2025, yields for non-financial and non-real estate industrial bonds have generally increased, with significant rises exceeding 9.5 basis points for certain private non-perpetual bonds and state-owned enterprise perpetual bonds [4][20] - The yields for financial bonds have also risen, particularly for mid-to-long-term secondary capital bonds and state-owned bank perpetual bonds, which have increased by over 12 basis points [4][20] - Some short-end products have stabilized, with yields for certain city and rural commercial bank bonds showing minimal changes [4][20] Group 4: Long-term Credit Bond Analysis - The spread between active long-term credit bonds and comparable government bonds has reached a 24-year high, with the spread for 10-year bonds widening to a new annual high [5][22] - Despite the apparent advantages of long-term credit bonds post-adjustment, the lack of incremental funding support suggests that duration strategies should remain cautious until market sentiment improves [5][22] Group 5: Local Government Bond Supply and Trading - The latest week has seen a weak sentiment in the bond market, with the average issuance rates for local government bonds continuing to rise, reaching new highs for bonds with maturities of 20 years and above [6][27] - The issuance rates for local government bonds with maturities of 10 years and above have widened to over 20 basis points compared to similar maturity government bonds, indicating a higher percentile reading for the year [6][27]

Group 1 - The second batch of Sci-Tech Innovation Bond ETFs will be listed on September 24, with 14 public funds participating in the issuance, following the first batch launched on July 17 [1] - The total issuance scale of the second batch of 14 Sci-Tech Innovation Bond ETFs reaches 40.786 billion yuan, with 13 of them exceeding 2.9 billion yuan each [1] - The total scale of Sci-Tech Innovation Bond ETFs has surpassed 170 billion yuan, while the overall scale of bond ETFs has exceeded 600 billion yuan for the first time [1] Group 2 - The largest bond ETFs include Convertible Bond ETF at 59.218 billion yuan, Short-term Bond ETF at 58.516 billion yuan, and Policy Financial Bond ETF at 45.615 billion yuan [3] - Other notable bond ETFs include 30-Year Treasury Bond ETF at 30.895 billion yuan and City Investment Bond ETF at 24.767 billion yuan [3] - The newly launched Sci-Tech Innovation Bond ETFs are expected to enhance the liquidity and market presence of bond ETFs [8] Group 3 - According to Guotai Junan Securities, the ticket interest strategy will dominate from 2025 onwards, with Sci-Tech Innovation Bond ETFs showing resilience during market adjustments [7] - The performance of actively managed pure bond funds indicates that short-term bonds outperform medium to long-term bonds, and credit bonds are favored over interest rate bonds [7] - The liquidity of bond ETFs is expected to improve as the current market environment gradually stabilizes [7] Group 4 - The new sales fee regulations by the China Securities Regulatory Commission are anticipated to create greater development opportunities for bond ETFs [8] - The proposed changes in redemption fees may lead to a shift in institutional investment from interest rate bond funds to bond ETFs, enhancing their attractiveness [8]

Core Viewpoint - The second batch of Sci-Tech Innovation Bond ETFs is set to be issued, with rapid expansion in scale enhancing liquidity and pricing efficiency in the market [1][2]. Group 1: Market Expansion and Product Details - As of September 8, 2025, the total scale of the first batch of 10 Sci-Tech Innovation Bond ETFs has exceeded 120 billion yuan, representing a growth of over 300% from the initial fundraising amount [1]. - The second batch consists of 14 Sci-Tech Innovation Bond ETFs, which received approval on September 8, 2025, and will be launched on September 12, 2025 [1]. - The introduction of new products is expected to further enrich investor choices and enhance market liquidity and pricing efficiency, thereby increasing the activity level of the Sci-Tech Innovation Bond ETF market [1]. Group 2: Competitive Landscape and Management Strength - The second batch of Sci-Tech Innovation Bond ETFs will face heightened competition, necessitating stronger capabilities in fixed income management, company empowerment, and ETF operation from the issuers [2]. - Huatai-PineBridge Fund stands out among the issuers, leading in the aforementioned areas. As of the end of Q2 2025, Huatai-PineBridge's assets under management exceeded 1 trillion yuan, with bond fund assets surpassing 260 billion yuan [2]. - The firm has also achieved an ETF management scale exceeding 100 billion yuan, ranking it among the top issuers in this category [2]. Group 3: Fund Management and Performance - The performance of actively managed pure bond funds in 2025 has shown that short-term bonds outperform medium to long-term bonds, and credit bonds outperform interest rate bonds [12]. - During the recent market adjustment, the decline in the value of Sci-Tech Innovation Bond ETFs was less severe compared to other interest rate bond ETFs, indicating better market resilience [12]. - The liquidity of bond ETFs is expected to continue improving as the current market environment stabilizes [12]. Group 4: Regulatory Changes and Future Opportunities - New sales fee regulations issued by the China Securities Regulatory Commission on September 5, 2025, are anticipated to create greater development opportunities for bond ETFs [17]. - The proposed changes in redemption fees may lead to a shift in institutional investment from interest rate bond funds to bond ETFs, enhancing the latter's growth prospects [17].

Group 1 - The second batch of 14 science and technology innovation bond ETFs will begin fundraising, with 9 products available for one day and 4 for three trading days, while 1 product will have a five-day fundraising period [1] - The first batch of 10 science and technology innovation bond ETFs has exceeded a total scale of 120 billion yuan, growing over 300% from the initial fundraising amount [2] - The introduction of the new batch of products is expected to further accelerate the expansion of the bond ETF market, with science and technology innovation bond ETFs becoming the highest market capitalization subcategory [2] Group 2 - According to Guotai Junan Securities, the interest rate strategy has been dominant since 2025, with science and technology innovation bond ETFs showing certain resilience during adjustment periods [3] - The bond market has experienced significant volatility since 2025, with the value of duration strategies declining, while credit bond interest rate strategies have shown advantages [3] - The recent regulatory changes regarding fund sales fees are expected to create greater development opportunities for bond ETFs, as higher redemption fee thresholds may redirect investments from other bond funds to bond ETFs [3]

Core Viewpoint - The article discusses the strategic considerations for investing in credit bonds and sci-tech bonds ETFs, focusing on cash retention versus bond allocation, seeking flexibility versus static returns, duration versus credit quality for yield, and the term structure of bond holdings [1][2]. Group 1: Investment Strategy Considerations - The decision to retain cash is often a short-term phenomenon during periods of weak market conditions, with low likelihood of cash retention in a weak credit bond ETF environment [1]. - In the current low interest rate and low spread environment, actively seeking static returns from credit bond ETFs is less cost-effective, with a tendency to extend duration for flexibility when interest rates stabilize or decline [1]. - Most ETF products tend to quickly increase duration after launch, with limited instances of duration shortening, influenced by market conditions [1]. - Credit ratings are dynamically adjusted based on market conditions, with high-rated bonds dominating during both strong and weak phases of the bond market [1]. - The overall term structure of holdings tends to favor a barbell strategy, balancing liquidity and yield, with a shift towards longer-duration bonds during recovery periods [1]. Group 2: Sci-Tech Bond ETF Preferences - The configuration preference for sci-tech bond ETFs is expected to align with credit bond ETFs during correction periods, focusing on high flexibility and high-rated bonds, while maintaining a barbell strategy [2]. - Following the recent correction, the attractiveness of coupon rates for sci-tech bonds has not significantly increased, making the maintenance of flexibility crucial [2]. - The current duration of sci-tech bond ETFs is relatively long, suggesting a preference for stabilizing duration in the near term [2]. Group 3: Selection Strategy Under Expansion Expectations - The selection strategy for sci-tech bonds is influenced by the narrowing spread between component and non-component bonds during market adjustments, with a recorded spread of -10.0 basis points as of August 29 [3]. - There is an anticipated increase in demand for perpetual (non-subordinated) sci-tech bonds due to expansion expectations, with three out of the first ten sci-tech bond ETFs including such bonds [3]. - The issuance of new sci-tech bonds has increased, with an average weekly issuance of 427 billion yuan since July, indicating a growing space for new issuances during market adjustments [3].

Report Summary 1. Industry Investment Rating - Not provided in the given content. 2. Core Viewpoints - As of August 8, the duration strategy was neutral, with medium - long - term duration portfolios performing slightly better than dumbbell - shaped ones. Long - term allocation sentiment was low, as the excess returns of ultra - long - term strategies were generally negative, and the willingness to extend duration was not strong [2][12]. - The trading duration of mainstream varieties was marginally shortened. As of August 10, the weighted trading durations of urban investment bonds and industrial bonds decreased, and some financial bonds were at low historical levels [3][16]. - As of August 11, 2025, the valuation yields and spreads of private enterprise industrial bonds and real - estate bonds were generally higher than other varieties. Most non - financial and non - real - estate industrial bond yields declined compared to the previous week, and more than half of financial bond yields decreased [4][20]. - The number of ultra - long - term credit bond transactions significantly declined. From August 4 - 8, 2025, the combined number of transactions of urban investment bonds and industrial bonds with a term of 7 years and above dropped from 515 to 389. The yields of some bonds were changing, with the yield spread between the most active 7 - 10 - year industrial bonds and 20 - 30 - year treasury bonds narrowing [5][24]. - The increase of local government bond indices was less than that of treasury bonds of the same term. Last week, the 7 - 10 - year and over - 10 - year local government bond indices rose 0.09% and 0.01% respectively, underperforming treasury bonds of the same term but outperforming ultra - long - term credit bonds [6][27]. 3. Summary by Directory 3.1 Quantified Credit Strategy - As of August 8, the duration strategy was neutral. Medium - long - term duration portfolios had better performance, with return deviations from the benchmark within 4bp. The short - end sinking strategy of urban investment bonds had a negative deviation of over 5bp, and the excess returns of urban investment duration and dumbbell - shaped strategies were only 1.2bp and 0.2bp respectively. Ultra - long - term strategies had negative excess returns, especially for industrial and secondary ultra - long - term combinations, with readings below - 10bp [2][12]. 3.2 Variety Duration Tracking - As of August 10, the weighted trading durations of urban investment bonds and industrial bonds were 2.00 years and 2.60 years respectively. Among commercial bank bonds, the weighted average trading durations of secondary capital bonds, bank perpetual bonds, and general commercial financial bonds were 4.20 years, 3.48 years, and 3.13 years respectively, with bank perpetual bonds at a low historical level. Among other financial bonds, the durations of securities company bonds, securities sub - bonds, insurance company bonds, and leasing company bonds were 1.54 years, 2.17 years, 2.71 years, and 1.37 years respectively, with some at low historical quantiles and leasing company bonds at a high historical quantile [3][16]. 3.3 Coupon Asset Heat Map - As of August 11, 2025, private enterprise industrial bonds and real - estate bonds had higher valuation yields and spreads. Non - financial and non - real - estate industrial bond yields mostly declined compared to the previous week. Among financial bonds, leasing company bonds, urban and rural commercial bank capital replenishment tools, and securities sub - bonds had higher valuation yields and spreads. More than half of financial bond yields decreased. The interest rates of general commercial financial bonds fluctuated within a narrow range (no more than 1.5BP), and the yields of some 1 - year - within urban and rural commercial bank perpetual bonds decreased significantly, with the yield of 1 - year - within urban commercial bank perpetual bonds dropping by more than 5BP [4][20]. 3.4 Ultra - long - term Credit Bond Micro - tracking - Since July, the lack of floating profits in ultra - long - term credit bonds and the difficulty in controlling drawdowns led to a significant decrease in trading demand. From August 4 - 8, 2025, the combined number of transactions of urban investment bonds and industrial bonds with a term of 7 years and above decreased from 515 to 389. The average trading yield of the most active 7 - 10 - year industrial bonds was marginally repaired, and the spread with 20 - 30 - year treasury bonds narrowed to 22bp, but the yields of over - 10 - year general credit bonds were still rising [5][24]. 3.5 Local Government Bond Supply and Trading Tracking - Last week, the 7 - 10 - year and over - 10 - year local government bond indices rose 0.09% and 0.01% respectively, less than the increase of treasury bonds of the same term but better than the overall decline of ultra - long - term credit bonds [6][27].