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].