Core Viewpoint - The report outlines the performance and investment strategies of the Galaxy Ruixin Pure Bond Fund for the second quarter of 2025, emphasizing its focus on stable returns through active management and risk control [1][2]. Fund Overview - Fund Name: Galaxy Ruixin Bond Fund - Fund Code: 007406 - Fund Type: Contractual open-end fund - Effective Date: December 26, 2019 - Total Fund Shares at Period End: 2,992,725.48 shares - Investment Objective: To provide long-term stable returns while maintaining liquidity and controlling risks [1]. Investment Strategy - The fund employs a top-down approach for dynamic asset allocation, focusing on active management in bond investments [2]. - Key strategies include: - **Duration Deviation Strategy**: Adjusting the portfolio duration based on interest rate expectations to maximize returns [2]. - **Yield Curve Strategy**: Selecting bond combinations based on anticipated changes in the yield curve [3][4]. - **Category Allocation Strategy**: Adjusting investment proportions based on credit risk cycles and yield spreads between different bond types [5]. Financial Indicators and Fund Performance - The fund's net asset value at the end of the reporting period was 1.0510 RMB per share, with a net value growth rate of 0.17% over the past three months [16]. - Performance comparison against the benchmark (China Bond Composite Full Price Index) shows: - Last three months: 0.17% vs. 1.06% - Last six months: 2.77% vs. -0.14% - Last year: 5.16% vs. 2.36% - Last three years: 9.32% vs. 7.13% - Last five years: 14.43% vs. 8.86% [8]. Asset Allocation - As of the end of the reporting period, the fund's total assets were primarily allocated to bonds, amounting to 2,711,899.97 RMB, representing 85.19% of total assets [17]. - The fund did not hold any stocks or asset-backed securities during the reporting period [17]. Fund Management - The fund manager, Galaxy Fund Management Co., Ltd., has committed to managing the fund with integrity and diligence, aiming for asset preservation and appreciation [12]. - The fund manager has not utilized proprietary funds for investment in this fund during the reporting period [18]. Market Environment - The report indicates a stable domestic economic performance in Q2 2025, with GDP expected to exceed 5%, despite external uncertainties due to trade tensions [14]. - The bond market experienced a favorable environment with declining yields following tariff announcements and subsequent monetary policy adjustments [15].

Core Viewpoint - The bond futures market in China is experiencing a bull-flat pattern, with expectations of continued support from monetary policy despite potential short-term fluctuations due to external pressures and policy disturbances [3][4]. Group 1: Market Performance - In the first half of the year, bond futures faced pressure, particularly in Q1, with a notable decline, while Q2 saw stabilization, resulting in a wide fluctuation in the ten-year government bond futures [1]. - As of June 27, the most traded T main contract slightly decreased from 109.301 at the beginning of the year to 109.045, and the weighted interest rate for ten-year bonds fell from 1.67% to 1.644% [1]. - The net basis of the bond market showed a convergence from high levels to negative territory from January to March, driven by tightening liquidity, while recovery was noted from April onwards [2]. Group 2: Market Phases - The bond market's trajectory can be divided into three phases: 1. From January 2 to March 17, tightening liquidity led to adjustments in TS and TF, with T and TL also experiencing corrections [2]. 2. From March 18 to April 9, market sentiment improved, leading to a comprehensive rebound due to a marginal easing of liquidity and reduced risk appetite from U.S.-China trade tensions [2]. 3. From April 10 to the present, the market initially declined but later rebounded as trade tensions eased and the central bank injected liquidity through reverse repos [2]. Group 3: Future Outlook - The bond market is expected to maintain a bull-flat pattern in the second half of the year, with inflation constraints supporting a continued loose monetary environment [3]. - The anticipated CPI recovery is unlikely to exceed previous highs, and the current economic environment suggests that actual interest rates may need to remain low to support high-quality economic development [3]. - The trend of narrowing term spreads is expected to continue, driven by a "scarcity of assets" in the residential financial management sector due to cooling expectations in the real estate market [3]. Group 4: Investment Strategies - Investors are advised to adopt two strategies in the bond futures market: buying long-term TL contracts on dips and shorting TS (or TF) while going long on T (or TL) [4]. - The current negative net basis across various contracts suggests potential for positive arbitrage opportunities, although caution is advised in short-term participation due to limited upside in net basis recovery [4].