Core Viewpoint - The bond fund market experienced a contraction in Q1 2025 after a strong performance in Q4 2024, but convertible bond funds led the market due to favorable conditions from both equity and bond markets [1][5]. Market Overview - In Q1 2025, a total of 54 bond funds were issued, a decrease of 11.48% from Q4 2024, with a total issuance of 1131.17 billion units, down 28.16% [2]. - The total share of bond funds reached 90.3 trillion units by the end of Q1 2025, a reduction of 4379.80 billion units compared to the end of 2024 [2]. - The share of medium- and long-term pure bond funds decreased by 2786.38 billion units, while short-term pure bond funds decreased by 1580.26 billion units [2]. Fund Performance - Convertible bond funds achieved the highest returns in Q1 2025, with a yield of 3.89%, outperforming other types of bond funds [5]. - The top-performing bond funds included products from Huabao and Fuguo, which focused on high-growth sectors like new energy and advanced manufacturing [7][8]. Investment Trends - There is a notable increase in the issuance of passive index bond funds, reflecting a growing demand for tool-based investment products among institutional investors [2][3]. - Short-term pure bond funds maintained popularity, with four new funds issued totaling 117.1 billion units, significantly above the market average [2]. Market Dynamics - The bond market is expected to maintain a volatile trend in the short term, with structural investment opportunities in the credit bond sector [10][11]. - The yield on 10-year government bonds rose from approximately 1.60% to 1.90% in Q1 2025, influenced by high funding rates and shifting expectations regarding monetary policy [6]. Future Outlook - Analysts predict that the bond market will continue to perform well throughout 2025, supported by economic stabilization and the implementation of expansionary fiscal policies [10][11]. - The focus on short-duration credit bonds is expected to provide attractive investment opportunities due to their favorable risk-return profile [10][11].