Core Viewpoint - Convertible bonds, known as "convertible corporate bonds," provide a balance of debt protection and equity upside, allowing investors to lock in downside risk while benefiting from stock price appreciation. In the past year, A-shares' recovery has led convertible bond funds to achieve an average annual return of 22.28%, outperforming other fixed-income funds. In a low-interest-rate and volatile bond market, convertible bond funds have garnered significant investor interest. This article introduces two funds that primarily focus on convertible bond strategies, highlighting their differences in asset allocation and security selection, which result in varying risk-return profiles [1]. Group 1: Fund Basic Information - The two funds discussed are the Dongfanghong Ju Li Bond Fund and the Xingquan Convertible Bond Mixed Fund, with the former established in September 2019 and managed by Kong Lingchao, who has 14 years of experience in securities management. The latter has been managed by Yu Miao since January 2019, with 15 years of experience in the same field [3][4]. Group 2: Investment Team - Kong Lingchao has a background in macro interest rates and stock strategy research, while Yu Miao focuses on rights-related assets. Both managers maintain a stable workload, with Kong managing 8 products totaling 25.3 billion and Yu managing 3 products totaling 4.1 billion [4][5]. Group 3: Investment Process - The Dongfanghong Ju Li Bond Fund adopts a bottom-up approach for selecting convertible bonds, while the Xingquan Convertible Bond Mixed Fund has a higher stock allocation limit of 30%. The former can flexibly adjust its convertible bond allocation between 0%-140%, while the latter maintains a stock allocation of 20%-30% and a convertible bond allocation of 50%-65% [7][8]. Group 4: Performance Comparison - Both funds generally maintain lower convertible bond allocation ratios compared to their peers. The Xingquan fund exhibits a more stable stock investment approach, focusing on value style, while the Dongfanghong fund's flexible allocation may underperform during high valuation periods but shows stronger resilience during market volatility [12][13]. Group 5: Fees - Both funds have comprehensive fee rates below the industry average, with the Dongfanghong Ju Li Bond Fund having lower management, custody, and transaction fees compared to the Xingquan Convertible Bond Mixed Fund [15].

Core Viewpoint - The banking wealth management business is facing challenges, including insufficient participation in the new economy and declining returns on pure fixed-income products. Institutions need to develop competitive "fixed-income plus" products and enhance trust among distributors and investors to adapt to economic transformation and capitalize on opportunities in capital markets [1][2][5]. Group 1: Necessity of Wealth Management Business Transformation - The attractiveness of fixed-income products is declining, necessitating the creation of more competitive offerings. The average monthly yield of wealth management products is projected to drop to around 2.0% by Q3 2025, down from 2.65% in 2024, indicating a decrease of 65 basis points [2]. - In contrast, equity assets are showing increasing returns, with the annual growth of the Wind All A index at 10.0% in 2024 and 26.4% from January to October 2025. The historical annualized return for the index over the past 20 years is 12.0%, suggesting that increasing equity allocations can enhance long-term returns for wealth management products [2]. Group 2: Investment Strategy for Wealth Management - The transformation of fixed-income products should focus on credit exploration, duration strategies, and leverage strategies to enhance portfolio returns while managing risk preferences of investors [6]. - Diversifying into equity assets can theoretically improve overall portfolio returns. Historical data shows that holding the Wind All A index over 20 years yields an annualized return of 12.0%, compared to 4.0% for the China Bond Composite Index [8][9]. Group 3: Timing and Selection Strategies - Timing strategies can further enhance portfolio returns by adjusting asset allocations based on economic cycles. A constructed economic cycle indicator shows a positive correlation with GDP growth and a negative correlation with bond yields [13][16]. - Implementing a timing strategy based on economic cycles can improve returns, with a simulated portfolio yielding an average annualized return of 5.08%, significantly outperforming a pure bond portfolio [16][18]. Group 4: Liability Side Transformation - The transformation on the liability side focuses on enhancing recognition and trust in "fixed-income plus" products among distribution channels and investors. This requires a dual approach of improving investment strategies and making necessary adjustments on the product side [22]. - Lengthening the investment duration of "fixed-income plus" products can help reduce loss risks and improve returns. Data indicates that extending the investment period from 9 months to 15 months leads to higher median returns and lower loss probabilities across various strategies [23][24]. Group 5: Overall Transformation Strategy - The transformation of the banking wealth management business is a lengthy process that requires enhancing investment capabilities through asset allocation, timing, and selection strategies to develop competitive "fixed-income plus" products. Additionally, building trust among distribution channels and investors is crucial for scaling these products [25].