Core Viewpoint - The bond market has experienced significant adjustments due to factors such as the stock-bond seesaw effect and tightening liquidity, leading to notable volatility in bond ETFs, particularly credit bond ETFs and sci-tech bond ETFs [2][4]. Group 1: Market Conditions - The bond market saw its largest decline since April, influenced by the stock-bond seesaw, rising commodity prices, and tightening liquidity [2]. - On April 24, all ten listed sci-tech bond ETFs fell below the 100 yuan mark, with the largest drop being 0.27%, while credit bond ETFs experienced an average decline of over 0.25% [2]. - By April 25, credit bond ETFs showed signs of recovery, while sci-tech bond ETFs continued to decline by approximately 0.1% [2]. Group 2: Price Dynamics - The fluctuation in the premium/discount rates of credit bond ETFs reflects market sentiment more than credit risk, with a reasonable premium/discount level for physical redemption products being around 15-20 basis points [3]. - When the discount exceeds 20 basis points, there are opportunities to consider mean reversion, and discounts over 40 basis points present potential arbitrage opportunities [3]. Group 3: Arbitrage Opportunities - During the adjustment phase of the bond market, there are opportunities for arbitrage when credit bond ETFs are deeply discounted [4]. - In the latter half of the past week, the sentiment in the bond market was weak, with some credit bond ETFs showing discounts exceeding 40 basis points, indicating increased arbitrage potential [4]. - For cash redemption sci-tech bond ETFs, discounts over 5 basis points or premiums over 2 basis points should be monitored for potential arbitrage opportunities, especially in weak market conditions [3][4]. Group 4: Investment Strategy - The current lineup of credit bond ETFs with a duration of less than five years is well-established, offering options for both physical and cash redemption products [5]. - If the bond market's volatility is expected to persist, credit bond ETFs that are deeply discounted may offer good value; conversely, if continued adjustments are anticipated, shorter-duration credit bond ETFs or cash redemption sci-tech bond ETFs should be prioritized for their better liquidity [5].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - In 2025, the bond ETF market expanded with 29 products across credit bonds, interest - rate bonds, and convertible bond index funds, reaching a total scale of 256.546 billion yuan. Credit bond index ETFs grew rapidly after adding 8 market - making bond ETFs at the beginning of the year [2][7][10]. - The 8 market - making credit bond/company bond ETFs have differences in index characteristics and fund investment. Both indexes are better than the medium - and long - term pure bond fund index and may be a better choice for investors to allocate credit bond funds [2]. - Bond ETFs have advantages in trading mechanisms over over - the - counter products, with higher trading efficiency and "T + 0" trading, and some support physical redemption [2]. - In 2025, eligible credit bond ETFs can be included in the pledge - style repurchase pool, marking a new stage in China's bond market liquidity management tools [2]. - Bond ETFs generally use sampling replication and active management strategies, but it is difficult to obtain excess returns, with most products underperforming the benchmark index [2]. - China's bond ETF market mostly shows discount trading, and the discount/premium level is positively correlated with the liquidity of the underlying bond market, while other factors can also affect it [2]. Summary According to the Directory 1. 2025 Bond ETF Market Expansion - There are 29 bond ETF products in total, covering credit bonds, interest - rate bonds, and convertible bond index funds, with a total scale of 256.546 billion yuan. Credit bond index ETFs have 11 funds with a scale of 112.192 billion yuan, interest - rate bond index ETFs have 16 funds with a scale of 102.964 billion yuan, and there are 2 convertible bond index ETFs with a scale of 41.389 billion yuan [7][10]. 2. Differences Among 8 Market - Making Credit Bond/Company Bond ETFs - Divided into two types based on tracking indexes, with a total scale of 4.2403 billion yuan. Both indexes perform better than the medium - and long - term pure bond fund index [13]. - Index characteristic differences are reflected in industry distribution, enterprise nature, and duration. For example, the Shenzhen market - making credit bond index and the Shanghai market - making company bond index have different selection methods, component bond quantities, and weighted methods [15][22]. - Fund investment differences are shown in investment concentration, leverage level, and duration. Different products have different characteristics in these aspects [25]. 3. Differences in Bond ETF Trading Mechanisms Compared to Over - the - Counter Products - Bond ETFs have significant advantages in trading convenience, allowing trading in both the primary and secondary markets with "T + 0" trading, suitable for trading - oriented investors [30]. - There are two redemption methods: cash redemption and single - market physical redemption. Only a few products support only cash redemption, while others support single - market physical redemption [31]. 4. Bond ETFs Eligible for Pledge - Style Repurchase - Currently, 13 products including treasury bond ETFs, local government bond ETFs, or policy - financial bond ETFs can participate in pledge - style repurchase. In 2025, eligible credit bond ETFs can also be included in the pledge - style repurchase pool, with specific requirements for eligible credit bond funds [33][34]. 5. Sampling Replication + Active Management Strategy of Bond ETFs - Bond ETFs generally use sampling replication due to the large number of component bonds, fast portfolio adjustment, and weak liquidity of bond indexes. They also use strategies such as increasing duration, adding leverage, investing in treasury futures, and band trading to enhance returns, but it is difficult to obtain excess returns, with most products underperforming the benchmark index [36][37][50]. 6. Regularity of Bond ETF's Discount/Premium Rate - China's bond ETF market mostly shows discount trading, with over 60% of trading days of most products in a discount state. - The discount/premium level is positively correlated with the liquidity of the underlying bond market. For example, local government bond ETFs often trade at a discount with larger standard deviations of discount rates, and credit bond ETFs have more significant changes in discount/premium rates than interest - rate bond ETFs, except for the stable performance of newly - listed market - making credit bond ETFs in 2025 [53][56][59]. - Market sentiment, supply - demand relationship, policy environment, etc., can also affect the discount/premium of bond ETFs. For example, the discount/premium rate of urban investment bond ETFs has narrowed rapidly since Q3 2023 [61].