Core Viewpoint - The article discusses the significant growth of "fixed income +" products in the current equity bull market, highlighting that the total market size of these funds reached a new high of 2.5 trillion yuan by the end of Q3 2025, with a quarterly increase of over 500 billion yuan [1]. Group 1: Growth of "Fixed Income +" Products - The understanding of "fixed income +" has evolved, with a general definition indicating that assets with less than 30% equity can be classified as such [1]. - The development of "fixed income +" funds has been ongoing for over 20 years, with the first public secondary bond fund launched in September 2002 [1]. - The total size of "fixed income +" funds was only 220.66 billion yuan at the end of 2014, but it has seen significant growth since then, largely driven by the decline in risk-free returns [1]. Group 2: Investment Strategies and Team Analysis - Various teams have adopted different investment strategies for "fixed income +" products, including multi-dimensional analysis frameworks and risk budgeting approaches [2]. - The Xingquan Fixed Income Enhancement Team is notable for its early exploration of fixed income enhancement investments, having launched the first public convertible bond fund in May 2004 [2]. - The team employs a value investment philosophy, focusing on the asymmetry of risk and return across different asset types [3]. Group 3: Performance Metrics and Risk Management - The article emphasizes the importance of performance metrics such as the Calmar ratio, which measures annualized returns against maximum drawdown, to evaluate "fixed income +" products [11][14]. - The Xingquan Fixed Income Enhancement Team has demonstrated strong performance, with several funds ranking in the top 20% of their categories based on returns and risk-adjusted metrics [11][15]. - The team has a structured risk management approach, including a risk warning mechanism that triggers discussions on adjustments when significant drawdowns occur [23]. Group 4: Market Trends and Future Outlook - The demand for "fixed income +" products has diversified, particularly among bank wealth management clients who are more sensitive to absolute returns and drawdowns [21]. - The article notes that as pure bonds enter a declining yield environment, more investors seeking absolute returns are likely to enter the "fixed income +" space [26]. - Xingquan aims to innovate within the "fixed income +" category by offering a variety of products, including index-enhanced and quantitative style-enhanced options, to meet diverse investor needs [26].

Core Viewpoint - The demand for convertible bonds has surged due to declining bond yields, attracting low-risk investors seeking higher returns. The key to leveraging convertible bonds lies in managing drawdowns while striving for enhanced returns [1]. Group 1: Investment Philosophy - The investment philosophy emphasizes that sustainable performance should not overly rely on future predictions, as the world is highly uncertain. A portfolio with a favorable risk-reward ratio is essential [1][10]. - The focus is on maintaining a balance between risk and return, ensuring that even if predictions are incorrect, the portfolio does not suffer significant losses [10][12]. Group 2: Investment Strategy - The strategy involves prioritizing odds in timing and selection of convertible bonds. When convertible bonds are significantly undervalued, the allocation shifts towards them, and vice versa when they are overvalued [2][14]. - The selection process for convertible bonds is based on a risk-reward analysis of the underlying stocks, considering factors like bond price, premium rate, and the characteristics of the corresponding stocks [2][20]. Group 3: Performance Metrics - The performance of the managed fund, Zhongyin Industrial Bond A, achieved a return of 9.31% over the past year, outperforming its benchmark by 6.95% [1]. - The fund manager has successfully navigated various market conditions by switching between stocks and convertible bonds, maintaining a strong performance record [3][13]. Group 4: Market Conditions and Timing - High-odds opportunities typically arise during market downturns or periods of panic, which aligns with the manager's left-side investment approach [2][24]. - The manager's strategy includes buying convertible bonds during market lows, capitalizing on their undervaluation and potential for recovery [22][24]. Group 5: Risk Management - The investment approach aims to find asymmetrical risk-reward opportunities, ensuring that the downside risk is minimized while allowing for potential upside [12][33]. - The focus on maintaining a stable risk-return profile helps in achieving consistent performance, even in volatile market conditions [11][30].