Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The research on the regulatory framework, fund operation, bond - allocation behavior, and the latest characteristics of the fund industry is crucial for analyzing the bond market trends. In a low - interest - rate environment, the impact of fund trading behavior on bond market assets is increasing. [8][10] - By examining the pricing power, seasonality, product innovation, and new trends of funds, investment opportunities and risks in the bond market can be identified. [9][10] Summary According to the Directory 1. Overview of Public Fund Bond Allocation - As of the end of 2024, the bond - allocation scale of public funds was 18.87 trillion, ranking second in the market, accounting for 10.7% of the 177 - trillion custody balance of the Chinese bond market. Since Q4 2023, the bond - allocation scale of bond funds has grown rapidly, with the growth rate reaching over 20%. In H1 2025, the growth rate returned below 10%. Bond - type funds prefer policy - financial bonds and general credit bonds. [2][16][18] 2. Overview of the Public Fund Market: Variety Classification and Institutional Framework Defined by Supervision (1) Public Fund Variety Classification: Divided by Investment Assets and Ratios - Public funds can be divided into stock funds, bond funds, money - market funds, fund - of - funds (FOF), and hybrid funds according to the investment assets and ratios. As of the end of 2024, fixed - income funds such as money - market funds and bond - type funds dominated, accounting for 75% of the total. [23][25] (2) Public Fund Regulatory Framework: Institutional System, Operational Norms, and Tax Regulations - **Public Funds**: Subject to multiple regulatory requirements from the new asset - management regulations, fund systems, and institutional reforms. The regulatory framework has been continuously updated since 1998, covering aspects such as investment scope, credit rating, leverage, duration, valuation methods, liquidity requirements, and investment concentration. [32][38] - **Money - Market Funds**: Have stricter regulatory requirements than general public funds in terms of leverage, duration, and liquidity. There are also special regulations for controlling scale, investment scope, and other aspects. There are also special types such as floating money - market funds and important money - market funds. [42][50] - **Tax Policy**: Public funds have advantages in value - added tax and enterprise income tax compared with institutional investors such as bank self - operations, which is an important reason for bank self - operations to invest indirectly. [56] 3. Public Fund Operation: How Products Operate from the Fund End to the Asset End (1) Fund Sources - Since 2017, public funds have entered a stage of rapid expansion. As of the end of 2024, fixed - income funds represented by bond funds and money funds dominated, accounting for nearly 75%. Bond funds are mainly for institutional investors, while money funds are for individual investors. [5] (2) Bond - Type Funds - In asset allocation, bond investment is the main focus, with policy - financial bonds and credit bonds having a relatively high proportion. The duration is mostly between 2 - 4 years, and the leverage ratio is between 110% - 130%. The risk - return characteristics of different types of bond funds vary. [5] (3) Money - Market Funds - In asset allocation, liquidity is the primary consideration, with inter - bank certificates of deposit, bank deposits, and repurchase transactions accounting for over 90%. The average remaining term is 70 - 85 days, and the leverage ratio is 105% - 110%. The deviation is controlled within 0.1%, and the yield is highly correlated with the fund interest rate. [5] 4. Impact of Fund Institutional Behavior on the Bond Market: Focus on Pricing Power, Seasonality, Product Innovation, and New Trends - **Pricing Power**: Funds have pricing power over most maturities of policy - financial bonds, long - term new Treasury bonds, and 1 - 3 - year credit bonds. [5][10] - **Seasonality**: Although public funds do not have obvious seasonal characteristics in bond - allocation behavior, there have been significant peaks in bond allocation in Q2 and year - end front - running in the past two years. [6][10] - **Product Innovation**: New products in the fund industry can reshape market capital flows and investment structures, bringing structural market conditions. [9][10] - **New Trends**: In a low - interest - rate environment, funds tend to increase duration and focus on trading. With the trend of public fund fee reduction, low - fee index products may see accelerated development. [10]