Fund Performance - In Q3 2025, the median return of fixed income + funds was 2.18%[1] - Convertible bond funds led with a median return of 13.01%[1] - Aggressive convertible bond enhancement funds followed with a median return of 5.58%[1] - Stock enhancement products achieved a median return of 2.44%[1] - Mild convertible bond enhancement funds lagged with a median return of 0.75%[1] Fund Scale Growth - The total scale of fixed income + funds exceeded 2 trillion yuan, reaching 2,076.47 billion yuan, an increase of 594.89 billion yuan from Q2 2025[2] - Fixed income + funds accounted for 19.3% of the broad bond fund market, up from 13.5%[2] - Stock enhancement funds saw the largest scale increase, growing by 366.34 billion yuan[2] - Mild convertible bond enhancement products increased by 135.19 billion yuan, while aggressive convertible bond and convertible bond funds grew by 54.78 billion yuan and 38.59 billion yuan, respectively[2] Top Performing Funds - The average return of top-performing stock enhancement funds was 6.42%, with the only fund exceeding 10% being Huatai-PB Dual Benefit Enhancement at 10.97%[4] - The average return of top-performing convertible bond enhancement funds was 13.23%, with Jin Ying Yuan Feng leading at 22.28%[4] - Notable convertible bond funds included Southern Changyuan Convertible Bond and Huaxia Convertible Bond Enhancement, with returns of 28.73% and 27.29%, respectively[4] Risk Considerations - Past performance of funds does not guarantee future returns, as future performance is influenced by macroeconomic conditions, market volatility, and style shifts[5]

Core Viewpoint - The convertible bond market is experiencing a bull market driven by institutional investors seeking opportunities in the "fixed income+" strategy, leading to increased stability and liquidity in the market [1][5][6]. Market Performance - As of July 18, the China Convertible Bond Index surpassed 450 points, closing at 454.23 points, with a year-to-date increase of 9.48%, significantly outperforming major indices like the Shanghai Composite Index and CSI 300 [2]. Institutional Participation - The influx of institutional funds, primarily from bond funds, has enhanced market liquidity and reduced volatility, contributing to a more stable upward trend in convertible bonds [3][6]. - Institutions are increasingly adopting a rational approach to investing in convertible bonds, focusing on stable returns and risk management [4][7]. Economic Context - The current economic recovery is expected to boost investment opportunities in low-risk and equity-oriented convertible bonds as the equity market improves [4][16]. Market Dynamics - The convertible bond market is supported by solid fundamentals, with a positive trend in the stock market acting as a core driver for bond price increases [9]. - As of July 18, the total outstanding convertible bonds amounted to 661.807 billion, reflecting a reduction of 71.815 billion since the beginning of the year, continuing a three-year trend of contraction [10]. Valuation Trends - There is a noticeable divergence in the valuation of convertible bonds, with some bond types experiencing increased conversion premiums while others see significant price appreciation [12][14]. - The current high absolute prices of convertible bonds indicate a complex valuation landscape, with low conversion premiums suggesting strong investment value despite reduced defensive characteristics [13][15]. Future Opportunities - Analysts suggest that future opportunities in the convertible bond market will primarily focus on growth sectors such as technology, military, and robotics, as well as bonds with strong conversion incentives [17]. - The "technology + dividend" dual strategy is favored, with technology assets showing relative valuation advantages and dividend bonds expected to become core assets in the context of ongoing demand for pure bond substitutes [17].