1. Report Industry Investment Rating There is no information provided in the content about the report industry investment rating. 2. Core View of the Report In Q2 2025, the number of newly - issued bond funds increased slightly, and the fundraising scale climbed marginally, but it was still lower than the same period last year, mainly due to the shift in risk preference diverting incremental funds from the bond market. In terms of holding behavior, the total scale of public funds' holdings of coupon - bearing assets remained stable, but there were structural differentiations. In Q2, funds mainly increased their holdings of bank sub - debt and industrial bonds, especially the scale of general credit bonds with a maturity of over 7 years increased sharply, and continued to reduce their holdings of general commercial financial bonds [5]. 3. Summary According to the Table of Contents 3.1 Overview of Incremental Funds: Improved New - Issue Performance and Restored Bond Fund Scale - In Q2 2025, 77 new bond - type funds were issued, with a fundraising scale of 97.4 billion yuan, showing improvement compared to Q1 but still a significant gap compared to the same period last year (113 bond funds were issued, raising 289.7 billion yuan) [2][11]. - The shift in risk preference diverted incremental funds from the bond market. In Q2, the equity market continued the main lines of technology - growth and low - volatility dividend. The quarterly increase of general stock - type funds exceeded 3%, 2 percentage points higher than that of bond - type funds. At the end of Q2, the outstanding share of bond - type funds was 9.6 trillion shares, an increase of 0.57 trillion shares compared to Q1 but lower than the same period last year [2][16]. - On June 6, the first batch of 9 credit - bond ETFs were officially included in the general repurchase of pledged bonds. The scale of credit - bond ETFs expanded rapidly. At the end of Q2, the scale of 8 benchmark - making credit - bond ETFs was 128.2 billion yuan, about 4.4 times that at the end of Q1 [19]. 3.2 Preference from Heavy - Holding Bonds: Gaming Duration Opportunities - The total scale of public funds' holdings of coupon - bearing assets remained stable, with structural differentiations. In Q2, the heavy - holding scale of credit bonds by funds was stable at around 800 billion yuan, a decrease of 0.37% compared to Q1, while the signal of increasing holdings of interest - rate bonds was obvious, with the holding scale increasing by 4.35% quarter - on - quarter [22]. - Funds actively pursued long - duration assets. The scale of general credit bonds with a maturity of over 7 years held by funds in Q2 soared to 14 billion yuan, and the number of holding funds increased from 76 at the end of Q1 to 124 at the end of Q2 [25]. - In terms of sub - bond types, funds mainly increased their holdings of bank sub - debt and industrial bonds in Q2, and continued to reduce their holdings of general commercial financial bonds. The heavy - holding scale of Tier 2 capital bonds and perpetual bonds (Two - Tier Bonds) increased by 26.5 billion yuan to 269.1 billion yuan, becoming the bond type with the largest heavy - holding scale. There was also a slight increase in industrial bonds, while the reduction was mainly concentrated in urban investment bonds and general commercial financial bonds, with a reduction scale of over 12 billion yuan [29]. 3.2.1 Urban Investment Bonds: Narrowed Supply and Preference Conversion - The supply of urban investment bonds continued to shrink. In Q2, 1.22 trillion yuan of urban investment bonds were issued, showing an obvious reduction compared to Q1 and the same period in previous years. After hedging against maturities, the net financing gap of urban investment bonds in Q2 expanded to 226.8 billion yuan, further narrowing the institutional allocation space. The scale of funds' holdings of urban investment bonds of all implicit ratings decreased, and the proportion of holdings of urban investment bonds with AA and below ratings by funds dropped to 55.5% [32]. - The proportion of 3 - 5 - year urban investment bonds held by funds increased. In Q2, the proportion of short - term urban investment bonds with a maturity of within 1 year held by funds dropped to 33%, the proportion of 3 - 5 - year bonds climbed to 15.6%, reaching a new high since 2022, and the proportion of bonds with a maturity of over 5 years increased marginally to 1.9% [38]. - In terms of regional distribution, Zhejiang, Shandong, and Jiangsu were still the provinces with the largest scale of urban investment bond allocation by funds. The holding duration of Shanghai's urban investment bonds was significantly extended [40][45]. 3.2.2 Industrial Bonds: Long - Duration Utility Bonds are Favored - Funds' increase in holdings of industrial bonds was concentrated in the transportation and utility industries. In Q2, the scale of funds' preference for allocating utility bonds and transportation bonds increased by more than 2 billion yuan quarter - on - quarter, and these two industries were among the top three industries with the largest scale of heavy - holding industrial bonds by funds, with heavy - holding scales of 27.4 billion yuan and 13 billion yuan respectively [4][48]. - In terms of duration distribution, the proportion of industrial bonds with a maturity of within 1 year held by funds reached a new high, climbing to 29%, and the average holding duration of the transportation and coal industries showed a shortening trend. On the other hand, the proportion of industrial bonds with a maturity of over 4 years also increased significantly, which was consistent with the extension of the holding duration of utility bonds from 1.4 years in Q1 to 2.5 years [4]. 3.2.3 Financial Bonds: The Trading Main Line of Secondary Bonds of National and Joint - Stock Banks - Funds have increased their holdings of Tier 2 capital bonds for three consecutive quarters. Since Q4 2023, the trend of funds increasing their holdings of Tier 2 capital bonds has been obvious, which is related to their characteristics of easy volume acquisition and high liquidity. In the context of low interest rates, seizing trading opportunities to earn capital gains has become one of the main lines [4][55]. - However, funds' sentiment towards allocating sub - debt of small and medium - sized banks cooled down. The proportion of small and medium - sized banks' Tier 2 capital bonds and perpetual bonds in the total holding scale of Two - Tier Bonds dropped to 12.7%, and investors' concerns about the capital replenishment of small and medium - sized banks increased [59]. - Funds significantly increased their holdings of 4 - 5 - year secondary bonds, and the proportion of secondary bonds with a maturity of over 5 years held by funds reached a new high. Compared with Q1, the scale of funds' holdings of Two - Tier Bonds with a maturity of 4 - 5 years increased by 18.8 billion yuan, and the proportion of this maturity increased to 29.5%. The proportion of Tier 2 capital bonds with a maturity of over 5 years increased to 4.4%, a significant breakthrough since 2020. For bank perpetual bonds, holdings were still concentrated in the short - end within 1 year, but the preference for allocating 3 - 5 - year bank perpetual bonds also improved [4][60].