Core Insights - The report updates the monthly timing model for 10-year government bond yields, enhancing the quantitative prediction model based on historical similarity to supplement subjective decision-making [2][12][82] - The new model incorporates additional factor indicators such as external pressures and asset pricing, assigns differentiated weights to various factors, and adjusts seasonal handling to improve accuracy [12][82] - The updated model shows improved predictive accuracy, achieving a directional prediction success rate of 68% from January 2019 to July 2025, with a higher rate of 74% in the last two years [2][82] Factor Selection and Weighting - The model selects indicators that reflect month-on-month changes and exhibit mean-reversion characteristics, including manufacturing PMI, PPI, and DR007 [15][19][26] - The weighting of factors is differentiated, with manufacturing PMI and PPI receiving full weight, while seasonal factors and asset pricing are assigned lower weights [16][36][47] - The model emphasizes timely updates, allowing predictions to be made before the beginning of each month [18][82] Model Performance and Strategy Backtesting - The model's performance is validated through backtesting, demonstrating that timing strategies outperform longer-duration benchmarks since 2019 [4][84] - Three types of strategies are designed based on the timing model: basic timing strategy, timing with government bond futures, and timing with leverage [4][84] - The backtesting results indicate that the leveraged timing strategy can achieve an annualized excess return of up to 128 basis points, with favorable risk-return metrics [4][84] Summary of Findings - The updated model maintains its timeliness and predictive capability, allowing for the calculation of the next month's yield center direction at the end of each month [2][82] - The model's limitations include challenges in accurately predicting the magnitude of yield center changes, but it still contributes positively to investment returns [4][84] - Overall, the report concludes that the updated timing model and its associated strategies provide significant advantages in enhancing bond investment returns [84]