Core Insights - The event titled "The Long-Term Viability of 'Fixed Income+' Strategies" was held in Shanghai, focusing on the positioning and future development paths of such products in a low-volatility environment [1] - The current low interest rate and market volatility have led to a "yield drought," prompting investors to seek better returns through 'Fixed Income+' strategies, which combine equity and debt [1][4] - The roundtable featured discussions on achieving better returns while maintaining strict drawdown controls, highlighting the importance of risk management in 'Fixed Income+' products [1][4] Group 1: Investment Strategies - Yujianfeng from Dongfanghong Asset Management employs a unified investment framework that includes a target volatility model and a maximum drawdown control model to manage risk and enhance returns [7][8] - The strategy involves selecting benchmark indices for both stocks and bonds, with a focus on maintaining a low drawdown target of 2%-4% for open-end products [8][10] - Guo Liyan from Huazheng Fund emphasizes the importance of buying quality assets at good prices and dynamically adjusting market risk factors based on market conditions [9][10] Group 2: Risk Management - Yujianfeng argues that the term 'Fixed Income+' should not separate fixed income from equities, as both asset classes can exhibit low correlation, allowing for better risk-adjusted returns [12][13] - Guo Liyan highlights the need for disciplined position sizing and a robust risk management mechanism to prevent 'Fixed Income+' products from turning into 'Fixed Income-' [14][15] - Both managers stress the importance of controlling concentration risk and ensuring that the portfolio is well-diversified to mitigate potential market shocks [10][15] Group 3: Market Outlook - Yujianfeng predicts that the long-term trend of declining interest rates will continue, making it challenging to achieve traditional returns from bonds alone [24][25] - Guo Liyan identifies new economic sectors, such as AI and advanced manufacturing, as key areas for investment, anticipating a shift in market dynamics as these sectors gain prominence [26][27] - The managers agree that while short-term market conditions may present challenges, the focus should remain on long-term structural opportunities within the evolving economic landscape [26][27]

Core Viewpoint - The article discusses the strategies and insights shared by industry experts on how to achieve better returns in a low-volatility environment through "fixed income plus" strategies, emphasizing risk management and disciplined investment approaches [1][2]. Group 1: Strict Control of Drawdown - Two main paths for strict drawdown control are identified: model-based constraints and refined security selection [4]. - The investment framework includes a unified approach across different product types, utilizing a target volatility model and a maximum drawdown control model to manage risk [5][6]. - For low-volatility products, a drawdown target of 2% is considered low, while a range of 2%-4% is aimed for open-end products [6][7]. Group 2: Avoiding "Fixed Income Minus" Risks - The article emphasizes the importance of maintaining a clear risk-return profile to prevent "fixed income minus" scenarios, especially during market upswings [10][11]. - A disciplined position design is crucial, with a focus on maintaining a maximum stock allocation of 12% and the possibility of reducing stock positions to zero when valuations are too high [13][14]. - Daily liquidity and risk management mechanisms are highlighted, including strict evaluation of risk-reward ratios for individual securities [14]. Group 3: Methodological Origins - The investment framework is rooted in asset pricing theory, focusing on managing volatility and diversifying risk rather than relying solely on macro timing [15][16]. - A three-layer system for portfolio construction is proposed, which includes style structure, industry allocation, and individual security selection [18][19][20]. Group 4: Future Outlook in a Low-Interest Rate Environment - The article notes that as interest rates decline, the investment logic for "fixed income plus" products must evolve, with a potential long-term return of 2%-2.5% expected from bonds [23][24]. - The shift towards equity over bonds is suggested as a strategy to achieve higher returns in a low-yield environment, with a focus on sectors like technology and cyclical finance [25][26]. - The importance of balanced allocation and diversification is emphasized, particularly in the context of emerging industries such as AI and robotics [27].

Core Insights - The "Fixed Income Plus" strategy is increasingly recognized as a vital tool for investors in a declining yield environment, emphasizing the importance of risk management over mere pursuit of returns [2][19][20] - The approach advocated by Yu Jianfeng focuses on a systematic and disciplined framework for managing risk, which is essential for achieving optimal risk-adjusted returns [4][12][20] Group 1: Strategy and Philosophy - The essence of the "Fixed Income Plus" strategy lies in asset allocation, utilizing the low or even negative correlation between equity and bond assets to achieve desired risk-return objectives [2][11] - Yu Jianfeng challenges the conventional understanding of "Fixed Income Plus" as merely a combination of bonds and equities, arguing for a more nuanced view that treats both asset classes as contributors to risk and return [3][11] - The strategy emphasizes that risk should be viewed as a resource allocated in advance rather than a cost incurred after the fact, with returns being a natural outcome of effective risk management [4][12] Group 2: Risk Management Techniques - Yu Jianfeng's methodology for controlling drawdowns is based on rigorous mathematical logic, asserting that maximum drawdown is a path-dependent variable influenced by portfolio volatility [5][12] - The framework promotes dynamic adjustments to portfolio volatility based on current drawdown levels and expected future volatility, allowing for proactive risk management [12][19] - The focus on risk management is designed to prevent excessive exposure to market fluctuations, ensuring that the investment experience remains aligned with the risk-return objectives [5][20] Group 3: Market Context and Future Outlook - In the current low-interest-rate environment, traditional reliance on bond yields as a safety net for "Fixed Income Plus" strategies is increasingly challenged, necessitating a shift towards more sophisticated portfolio management techniques [19][20] - The future of "Fixed Income Plus" investments will depend more on effective risk management and asset allocation rather than solely on bond performance, aiming to provide investors with a stable risk-return profile [19][20] - The investment philosophy presented by Yu Jianfeng offers a counter-narrative to the pursuit of extreme returns, advocating for a focus on maximizing risk-adjusted returns in a complex market landscape [20]

Core Viewpoint - The article discusses the changing demands of fund holders as the Shanghai Composite Index rises above 3600 points, emphasizing a shift towards rational and calm investment strategies focused on controlled drawdowns and enhanced returns rather than high-risk, high-reward products [1][3]. Group 1: Investment Philosophy and Risk Management - Yu Jianfeng, the fund manager at Dongfanghong Asset Management, prioritizes risk management in both asset allocation and alpha strategies, ensuring stable product volatility for investors [3][4]. - His investment framework is rooted in the scientific principles of asset pricing, believing that risk premium theories apply universally across markets [5][6]. - The core of his asset pricing approach is centered around risk premium, using maximum drawdown as a primary constraint for product classification [6][7]. Group 2: Asset Allocation Strategies - Yu Jianfeng employs a dynamic adjustment strategy based on the correlation between stocks and bonds, utilizing benchmarks like the CSI A500 for stocks and the China Bond Composite Index for bonds [9][10]. - He tracks daily correlations to manage risks effectively, adjusting positions based on volatility and net asset value movements [10][11]. - The focus on maintaining a stable risk profile allows for better preemptive risk control, enhancing user experience [10][12]. Group 3: Alpha Generation Techniques - In stock selection, Yu utilizes a multi-factor model to enhance returns while adhering to risk management principles [13][22]. - His bond strategy incorporates a riding strategy that capitalizes on the downward movement of yield curves, aiming for capital gains [13][25]. - The introduction of a Long Gamma strategy in convertible bonds allows for the exploitation of the convexity and undervaluation of options, contributing to consistent returns [13][26]. Group 4: Performance Metrics - The Dongfanghong Mingjian Preferred Mixed Fund achieved a net value growth rate of 15.22% in 2024, with an additional 7.39% increase in the first half of the year, significantly outperforming its benchmark [14][30]. - Yu Jianfeng's commitment to risk management is reflected in the strong performance of his funds, which have consistently provided higher returns with controlled risks [14][29]. Group 5: Market Context and Product Demand - In a low-interest-rate environment, low-volatility fixed income plus products are increasingly sought after by investors who prioritize capital preservation alongside reasonable returns [16][17]. - The confidence of fund managers in their own products, as evidenced by significant personal investments, enhances credibility and investor trust [16].