Core Viewpoint - The convertible bond market is experiencing a significant breakthrough, with the China Securities Convertible Bond Index rising 1.35% to 505.77 points, marking the first time it has surpassed 500 points in a decade, despite ongoing net outflows from convertible bond ETFs [1][3]. Market Performance - The Shanghai Composite Index has achieved a 13-day winning streak, contributing to a strong performance in the convertible bond market [1]. - The trading volume in the market is approaching 100 billion yuan, indicating robust activity [1]. ETF Fund Flows - Despite the rise in the convertible bond market, there has been a continuous net outflow from convertible bond ETFs, with the fund share decreasing from a peak of 4.85 billion shares in early September 2025 to 3.8 billion shares by the end of 2025 [1][3]. - The mid-price of public convertible bonds has reached 133.72 yuan, with 37 convertible bonds priced over 200 yuan [3]. Price Movements - The top-performing convertible bonds since December 2025 include: - Jia Mei Convertible Bond: +175.61% to 293.26 yuan - Mao Cai Convertible Bond: +139.21% to 239.78 yuan - Zai 22 Convertible Bond: +126.68% to 301.90 yuan [4]. Institutional Behavior - Insurance funds have significantly reduced their holdings in the Shanghai Stock Exchange convertible bonds, with a 15.12% decrease in the proportion of convertible bonds held by insurance funds in December 2025 [5]. - Other institutional investors, such as banks and social security funds, have increased their holdings during the same period [5]. Future Outlook - Analysts expect the convertible bond market to maintain its strength in the first quarter of 2026 due to seasonal capital inflows and positive sentiment ahead of the "Two Sessions" [6]. - The median conversion premium rate for public convertible bonds is approximately 33%, indicating high valuations that may persist due to supply-demand imbalances [6]. - The total market size of public convertible bonds is around 527.1 billion yuan, having shrunk by 183.6 billion yuan compared to the end of 2024 [7].