Investment Rating - The investment rating for the banking industry is "Positive" (maintained) [1] Core Insights - The banking sector is experiencing a shift in fund investment behavior, with banks redeeming low-yield money market funds and increasing their holdings in credit bond funds to enhance returns [5][57] - The total fund holdings of listed banks reached approximately 6.37 trillion yuan, accounting for 2.03% of total assets as of the end of the first half of 2025 [15][18] - The proportion of fund investments in the fair value through profit or loss (FVTPL) category is 48.5%, with city commercial banks showing even higher ratios [15][22] Summary by Sections 1. Fund Investment Participation and Scale - The self-managed fund holdings of listed banks as of June 2025 were approximately 6.37 trillion yuan, with shareholding banks and city commercial banks having significant investment scales of 2.84 trillion yuan and 1.72 trillion yuan, respectively [15][18] - The investment in money market funds decreased to 9.10%, while the proportion of passive index bond funds increased to 7.90% [23][25] 2. Changes in Fund Investment Behavior - Banks are redeeming money market funds and low-yield rate bond funds while increasing their investment in credit bond funds [5][57] - The redemption pressure for money market funds was primarily concentrated in the first quarter of 2025, driven by liquidity management needs and yield enhancement [49][55] 3. Future Expansion and Impact of Redemption Fee Reform - Smaller banks have greater expansion potential in fund investments, driven by the need for redundant fund screening and tax-exempt income [3][3] - The implementation of redemption fee reforms may catalyze preventive redemptions by banks, leading to a preference for customized bond funds and bond ETFs [3][3]

Core Insights - The article emphasizes the importance of financial education in safeguarding financial rights and enhancing quality of life, particularly through the actions of the fund industry [1] Fund Performance and Characteristics - Fixed income securities, including government bonds and central bank bills, are the primary investment objects for funds, with a performance of 3.03% and a maximum drawdown of -0.36% for 2024 [5] - Short-term pure bond funds are characterized by low risk, with most funds allocated to short-term bonds with maturities not exceeding 3 years [5] - Long-term pure bond funds have similar investment objects to short-term pure bond funds, with a performance of 4.59% and a maximum drawdown of -0.67% for 2024 [6] Risks Associated with Bond Funds - Credit risk arises when bonds in the fund default, affecting overall returns and potentially leading to losses [8] - Interest rate risk is highlighted as a core concern, where rising market interest rates inversely affect bond prices, potentially leading to losses [7] - Liquidity risk can occur during market tightness, leading to increased short-term bond rates and potential difficulties in buying or selling bonds at favorable prices [8] Investor Considerations - Investors should align their risk tolerance and return objectives with suitable fund types, such as short-term bond funds for lower risk tolerance and longer investment horizons for those with higher risk tolerance [9] - Historical performance metrics, including annualized returns and maximum drawdown, are essential for evaluating fund performance [10] - The Calmar ratio, which measures risk-adjusted returns, is a useful metric for assessing fund performance relative to risk [11] Fund Management and Team - The experience and historical performance of fund managers are critical, with a focus on those with extensive experience and a proven track record [12] - The strength of the research and risk management teams is also important, particularly for large fixed income fund companies with robust systems [12] Fund Holdings and Credit Risk Assessment - Regular reports should be reviewed to assess the top five bond holdings and their credit ratings, prioritizing funds with a high proportion of high-rated bonds to mitigate credit risk [13] Fund Size Considerations - It is advisable to consider funds of moderate size to avoid issues related to small fund sizes, such as the risk of liquidation [14]

1. Report Industry Investment Rating The provided content does not mention the industry investment rating. 2. Core Viewpoints of the Report - This week, the pressure of fund selling intensified, and the sold bond types spread from long - term and ultra - long - term interest - rate bonds to credit bonds and Tier 2 capital bonds. The pessimistic sentiment in the bond market spread again, with the 10Y Treasury bond rate smoothly breaking through the key point of 1.80%. Although the bond market sentiment recovered on Friday and funds turned to net buying, the bond market allocation buyers may continue to be absent, and there may still be adjustment space in the bond market, especially for ultra - long - term bonds [9]. - Since August, the growth rate of bond fund scale has been lower than that of stock funds. This week, the issuance share of newly established bond funds remained low, and the net value of various types of bond funds declined significantly, with credit bond funds showing relatively better resistance to decline. Most interest - rate and credit bond funds recorded negative returns in the past three months [90]. 3. Summary According to the Directory 3.1 Overall Sentiment: The Bond Market Vitality Index Declined Significantly - As of September 12, the bond market vitality index decreased by 29 pcts to 22% compared with September 5, and the 5D - MA decreased by 15 pcts to 32%. The rising indicators of bond market vitality included the trading volume of the active 10Y China Development Bank bond / the balance of 9 - 10Y China Development Bank bonds and the excess level of the inter - bank bond market leverage ratio compared with the average of the past 4 years. The declining indicators included the median duration of medium - and long - term pure bond funds, the implied tax rate of the 10 - year China Development Bank bond, and the turnover rate of 30Y Treasury bonds [1][10][12]. 3.2 Institutional Behavior: Funds Sold Heavily, while Rural Commercial Banks and Insurance Companies Strengthened Their Buying 3.2.1 Buying and Selling Strength and Bond Type Selection: Funds Bought Interest - Rate Bonds within 1Y and Sold All Other Types - The net buying strength ranking in the current bond market this week was: large banks > insurance companies > wealth management > other product types > rural finance > others > money market funds > foreign - funded banks. The net selling strength ranking was: funds > city commercial banks > joint - stock banks > securities firms. For ultra - long - term bonds (bonds over 15Y), the net buying strength ranking was: insurance companies > rural commercial banks > wealth management > securities firms > others > other product types, and the net selling strength ranking was: funds > large banks > joint - stock banks > city commercial banks > foreign - funded banks [22]. - From September 8 to 12, the bond market showed different trends each day. Funds mainly sold long - term and ultra - long - term interest - rate bonds, and gradually increased their selling of credit bonds and Tier 2 capital bonds. Rural commercial banks mainly bought long - term and ultra - long - term bonds, and insurance companies' buying strength gradually increased [22][23]. 3.2.2 Trading Portfolio: All Types of Bond Funds Continued to Reduce Duration, with Credit Bond Funds Having a Larger Reduction - As of September 12, the median duration of the full - sample medium - and long - term pure bond funds decreased by 0.11 years compared with September 5. Among them, the median durations of pure interest - rate bond funds, interest - rate bond funds, and credit bond funds decreased by 0.06 years, 0.12 years, and 0.21 years respectively. The median durations of high - performance interest - rate bond funds and credit bond funds decreased by 0.06 years and 0.32 years respectively [42]. 3.2.3 Allocation Portfolio: Wealth Management Extended Duration in the Secondary Market, while Rural Commercial Banks and Insurance Companies Deployed Ultra - Long - Term Bonds - **Differentiated Primary Subscription Demand for Treasury Bonds and Policy - Financial Bonds**: This week, the primary subscription demand for Treasury bonds and policy - financial bonds was differentiated, and the demand for ultra - long - term bonds was also differentiated. The weighted average overall multiples of Treasury bonds and policy - financial bonds changed compared with the previous week [54]. - **Large Banks**: The increase in the supply of ultra - long - term bonds may restrict large banks' ability to buy in the secondary market. In terms of short - term Treasury bonds, large banks increased their net buying of Treasury bonds within 1Y since June, but the cumulative net buying scale this year was still far lower than that of the same period in 2024. The net buying of 1 - 3Y Treasury bonds increased from May to July and decreased in August [58][59]. - **Rural Commercial Banks**: The cumulative net buying scale of rural commercial banks this year was significantly weaker than in previous years, mainly due to the weak net buying of short - term bonds within 1Y. However, the net buying strength of 7 - 10Y and over 10Y bonds was significantly higher than in previous years [71]. - **Insurance Companies**: The net buying strength of insurance companies for bonds this year was significantly higher than in previous years, mainly due to their strong buying of ultra - long - term bonds over 10Y. As of September 12, the ratio of the cumulative net bond buying of insurance companies to the cumulative premium income and the ratio to the cumulative issuance scale of over 10Y government bonds were both slightly higher than at the end of September last year [79]. - **Wealth Management**: Since June, the cumulative net buying scale of wealth management products has continued to rise, and the net buying of bonds over 10Y was particularly strong. This week, the duration of the net - bought bonds in the secondary market remained flat, still at the highest level since February 23, 2024 [85][87]. 3.3 Asset Management Product Tracking: Most Interest - Rate and Credit Bond Funds Recorded Negative Returns in the Past Three Months - Since August, the growth rate of bond fund scale has been lower than that of stock funds. This week, the scale of newly established bond funds was only 27 billion yuan, continuing to decline from the previous week [90]. - This week, the net value of various types of bond funds declined significantly, with credit bond funds showing relatively better resistance to decline. Most interest - rate and credit bond funds recorded negative returns in the past three months [90].

Group 1 - The recent decline in the national bond market has led to the main contract of bond futures hitting a six-month low, with the 30-year bond futures weighted index nearing its yearly low [1] - The yield on the 10-year active bond has risen above 1.8%, increasing from 1.63% to a peak of 1.83% over two months, marking a 20 basis points rise [1] - The cumulative yield of the China Securities Comprehensive Bond Index for the year is only 0.33%, with passive index bond funds and medium-to-long-term pure bond funds showing negative average net values in August [1] Group 2 - The current adjustment in the bond market is driven by two main factors: the continuous bull run in the stock market, which has increased investor risk appetite, and the implementation of anti-involution policies that have raised inflation expectations [1] - The equity market's rising risk appetite is expected to continue, with the Shanghai and Shenzhen stock exchanges seeing over 10 trillion yuan in trading volume for 76 consecutive trading days [2] - Despite the bullish expectations, the real economy still requires further improvement, with weak demand in real estate and exports limiting the upward pressure on prices [2]

Group 1 - Recent decline in the bond market, with the main contract for government bond futures hitting a six-month low and the 30-year bond futures index nearing its yearly low [1] - The yield on the 10-year government bond has risen above 1.8%, increasing from 1.63% to a peak of 1.83% over two months, representing a 20 basis points increase [1] - The cumulative yield of the China Securities Comprehensive Bond Index for the year is only 0.33%, with passive index bond funds and medium-to-long-term pure bond funds showing negative average net values in August [1] Group 2 - The current adjustment in the bond market is driven by two main factors: the sustained bull market in equities increasing investor risk appetite, and the implementation of anti-involution policies raising inflation expectations [1] - The equity market's risk appetite is expected to continue, with significant trading volumes in the Shanghai and Shenzhen markets and a notable increase in the non-ferrous metals industry index [2] - Despite the bullish expectations, the real economy still requires further improvement, with weak demand in real estate and exports limiting the upward pressure on prices [2]

Core Insights - The bond market is currently in a low-yield, high-volatility state, contrasting with the previous year's high-yield, high-volatility environment. This shift suggests frequent "mispricing" opportunities, prompting investors to adopt a "low position + high win rate" strategy for defensive counterattacks and to capitalize on oversold rebound opportunities [1][10][21]. Group 1: Market Conditions - Since the beginning of 2025, the 10-year government bond yield has shown significant volatility, rising from approximately 1.60% at the start of the year to around 1.78% by August 20, with a peak close to 1.90%. The rolling standard deviation indicates that the yield's volatility has increased, with a median of about 0.03%, higher than the median of 0.028% from 2021 to 2024 [10][11]. - The performance of bond funds has declined in 2025, with the median annualized return for medium to long-term pure bond funds at 0.83%, significantly lower than the 3.98%, 2.36%, 3.47%, and 4.58% returns from 2021 to 2024. Short-term pure bond funds also reflect a similar trend, with a median return of 1.41% [11][12]. Group 2: Fund Evaluation - The Calmar ratio is deemed more reflective of true risk compared to the Sharpe ratio, although both should be used in conjunction. The Sharpe ratio is more suitable for short and pure bond funds with lower volatility and drawdown, while the Calmar ratio is better for long bond funds and secondary bond funds that exhibit higher volatility and deeper drawdowns [2][16]. - In 2025, investors are advised to prioritize the Calmar ratio alongside the Sharpe ratio to better select bond funds, as the low-yield, high-volatility environment increases the demand for fund managers' ability to control drawdowns [19][20]. Group 3: Investment Strategy Adjustments - The bond market is still in a headwind phase, with the trend for bullish positions delayed. Despite rising interest rates and a steepening curve reducing bullish sentiment, the high volatility presents frequent "mispricing" opportunities. Investors are encouraged to maintain a "high-grade, short-duration, high-liquidity" base to better control drawdowns while selectively participating in long and ultra-long bonds after significant declines [3][21][22]. - The strategy should focus on quick trades and timely profit-taking, as the current market conditions do not favor long-term bullish positions. Historical data indicates that after significant declines, the 10-year government bond typically experiences a short-term rebound [22][24].

Core Viewpoint - The industry of interbank certificate of deposit index funds is facing a dual challenge of declining net value and shrinking scale, with average returns significantly lagging behind other low-risk investment products [3][4][5]. Performance Summary - As of July 25, 2023, the average return of 91 interbank certificate of deposit index funds was 0.64%, underperforming compared to traditional money market funds (0.78%) and short-term pure bond funds (0.80%) [3][5]. - The total scale of these funds has decreased from 348.32 billion yuan at inception to 125.17 billion yuan, a decline of 64.06% [3][10]. - The largest fund, Huatai Baichuan Interbank Certificate of Deposit Index, holds approximately 9.39 billion yuan, while the smallest fund has shrunk to about 210 thousand yuan [3]. Reasons for Underperformance - The poor performance of interbank certificate of deposit index funds is attributed to the downward trend in deposit rates, which compresses coupon income and limits the potential for yield enhancement due to a passive management approach [4][5]. - The liquidity constraints imposed by a 7-day holding period further diminish the attractiveness of these funds to investors [4]. Scale Reduction - By the end of Q2 2023, 49.45% of the funds had a scale of less than 200 million yuan, and 26.37% were classified as "mini funds" with less than 50 million yuan [10]. - Only 7 funds experienced growth in scale, indicating that 92.31% of interbank certificate of deposit index funds have seen a reduction in size since their inception [10]. Notable Fund Performances - The only fund to report a loss this year was Dacheng Interbank Certificate of Deposit Index, with a return of -0.11% [7]. - The top-performing fund, Shangzheng Interbank Certificate of Deposit Index, achieved a return of 2.27% as of July 25, 2023 [9]. Investor Composition - The majority of investors in these funds are individual investors, with many funds experiencing significant redemptions as marketing interest waned and returns diminished [15].

Report Investment Rating No investment rating information is provided in the report. Core Viewpoints - In June, the bond market generally rose, with ultra-long bonds showing prominent gains. Without considering coupon income, from an industry perspective, bonds in the transportation industry had a relatively high net price increase, with a monthly increase of 0.12%, indicating a certain alpha. In terms of maturity, there was positive alpha in government bonds and local government bonds with a maturity of over 10 years in June. From a subordinated perspective, commercial bank subordinated bonds had obvious alpha in June [1][10]. Summary by Directory 1. Overview of Yields of Various Bond Types - In June, the bond market generally rose. For interest rate bonds, the yields of all interest rate bonds declined. The average yields of government bonds, policy bank bonds, and local government bonds declined by 7BP, 5BP, and 5BP respectively. For credit bonds, the yields of almost all credit bond types declined. Among them, the 20-year urban construction investment bonds with an implied rating of AA+ had the largest decline in yield, with an average decline of 17BP [1][11]. - As of June 30, the historical percentile levels of interest rate bond yields were relatively high, with most interest rate bond types having a three-year historical percentile level of over 6%. The 30-year policy bank bond had the highest three-year historical percentile level of 9.6%. For credit bonds, the historical percentile levels of most credit bond yields were low, below 3%. However, some credit bond types had relatively high historical percentile levels, such as the 7-year AA- second-tier capital bonds and 7-year AA securities company bonds, with historical percentiles of 15.2% and 14.7% respectively [14]. 2. Industry Alpha Tracking - In June, all industry credit bonds rose, with an average net price increase of 0.07%. Among them, bonds in the transportation industry had a relatively high net price increase, with a monthly increase of 0.12%, indicating a certain alpha. Urban construction investment bonds and real estate bonds had an average net price increase of 0.03%, which were relatively small increases [1][15]. - In the real estate bond sector, in June, AAA-rated and public enterprise real estate bonds had obvious positive alpha, while AA+-rated real estate bonds had negative alpha. Specifically, the average net price increase of AAA real estate bonds was 0.04%, significantly higher than other real estate bond types. Public enterprise bonds had an average increase of 0.12%, higher than real estate bonds of other enterprise types. AA+ real estate bonds had an average net price decline of 0.01%, the only declining real estate bond type. In terms of specific bonds, the bonds of Longfor Group had a net price increase of over 2%, while the bond H20 Hejing 6 had a net price decline of 3.79% [19]. - For urban construction investment bonds, in June, different types of urban construction investment bonds had different price movements. Regionally, urban construction investment bonds in Guangxi declined by 0.07% in a single month, the most significant decline, indicating obvious negative alpha. Urban construction investment bonds in Hebei and Xinjiang had relatively high increases, with an average increase of 0.14%. In terms of ratings, AA- urban construction investment bonds had negative alpha, with an average net price decline of 0.13%, significantly lower than other rated urban construction investment bonds [26]. - In the financial bond sector, in June, private enterprise financial bonds had a relatively significant net price decline, with an average monthly decline of 0.03%, the only declining financial bond type, indicating negative alpha. The bonds with relatively high increases in June were 24 Kunpeng Investment MTN003, 25 Kunpeng Investment MTN001B, and 23 CATIC Finance 08, with net price increases of 3.06%, 3.06%, and 2.36% respectively. The bonds with relatively high declines were 21 Shenzhen Jusheng 01 and 20 Shenzhen Jusheng 01, with net price declines of 7.2% and 10.59% respectively [28]. 3. Maturity Alpha Tracking - In June, government bonds and local government bonds with a maturity of over 10 years had positive alpha. Data showed that government bonds with a maturity of over 10 years rose by 1.1% and local government bonds rose by 0.93%, significantly higher than other interest rate bond types. The main reason was that ultra-long interest rate bonds had the advantage of duration leverage, and the decline in yields led to a more significant increase in prices [2][33]. - Among long-term representative bonds, the ultra-long credit bond 24 Chengtong Holdings MTN009B had the highest monthly increase of 3.63% [37]. 4. Subordinated Alpha Tracking - In June, commercial bank subordinated bonds had positive alpha. Data showed that commercial bank subordinated bonds had an average increase of 0.05%, higher than commercial bank ordinary bonds and subordinated bonds. The alpha of commercial bank subordinated bonds mainly came from the significant decline in the yields of 7-year and 10-year commercial bank second-tier capital bonds and perpetual bonds. Although the yields of 20-year and 30-year commercial bank ordinary bonds declined more significantly, due to the small scale of ultra-long commercial bank bonds, the decline in yields had little impact on the overall price movement [2][39]. 5. June Public Bond Fund Ranking - In June, hybrid bond funds of the second category had the highest average increase among public bond funds. The average increase of hybrid bond funds of the second category was 1.04%, followed by hybrid bond funds of the first category with an average increase of 0.57%, medium- and long-term pure bond funds with an average increase of 0.29%, and short-term pure bond funds with an average increase of 0.18% [2][40]. - The top five medium- and long-term pure bond funds in terms of increase in June were Huarun Yuanda Runxiang Three-Month Fixed-Term Open A, Pengyang Chunxi One-Year Fixed-Term Open, Huataibaoxing Zunyi Interest Rate Bond 6-Month Holding A, Pengyang Chunli Regularly Open A, and Minsheng Jiayin Hengyu [46]. - The top five short-term pure bond funds in terms of increase in June were Tianhong Yueyuebao 30-Day Holding A, Baoying Ansheng Medium- and Short-Term Bond A, Zheshang Huijin Shuangyuexin 60-Day Rolling Medium- and Short-Term Bond A, Great Wall Short-Term Bond A, and Zheshang Huijin Yuexiang 30-Day Rolling Holding A [47]. - The top five hybrid bond funds of the first category in terms of increase in June were Great Wall Active Income Enhancement A, Everbright Medium- and High-Grade A, Tianhong Tianli E, Golden Eagle Add Interest Medium- and Long-Term Credit Bond A, and Minsheng Jiayin Xinxiang A [48]. - The top five hybrid bond funds of the second category in terms of increase in June were Golden Eagle Yuanfeng C, Huabao Enhanced Income A, China Merchants Anrui Enterprising C, Caitong Income Enhancement C, and Minsheng Jiayin Enhanced Income A [49].

Group 1 - Guotai Junan has completed its A-share buyback, with a total amount of 1.211 billion yuan and a buyback price range of 16.49 to 19.57 yuan per share, indicating confidence in its own value [1] - The buyback accounted for 0.3830% of the company's total share capital, and the shares will be held in a dedicated account for future sale within 12 months [1] - This action may enhance investor expectations regarding stock prices and increase market attention on the securities industry, potentially leading to similar buyback actions within the sector [1] Group 2 - Public funds have shown a strong self-purchase trend, with a total net subscription amount of 5.318 billion yuan in the first half of the year, a year-on-year increase of 189.65% [2] - Equity funds performed well, with net subscriptions of 2.373 billion yuan, accounting for 44.63% of total net subscriptions, reflecting a 76.04% year-on-year growth [2] - Bond funds were the main contributors to self-purchases, with a total net subscription of 2.194 billion yuan, indicating a preference for stable assets in the market [2] Group 3 - Hongta Securities has become the first listed brokerage to release its mid-year performance forecast, expecting a net profit of 651 million to 696 million yuan, representing a year-on-year growth of 45% to 55% [3] - The active market trading and recovery in IPO and refinancing activities have positively impacted the performance of listed brokerages [3] - Analysts predict that the second quarter's performance for listed brokerages may continue to show high growth, with net profits potentially exceeding 20% [3] Group 4 - Over 2,000 private equity funds reached new net asset value highs in June, reflecting ongoing structural opportunities in the market [4] - More than 90% of large private equity funds achieved positive returns in the first half of the year, with quantitative private equity funds showing a 100% positive return rate [4] - The recovery in the private equity issuance market suggests an influx of new capital, which may enhance market activity and overall sentiment [4]

Core Insights - The public fund industry in China experienced a significant increase in net subscription amounts, reaching 5.318 billion yuan in the first half of 2025, a 189.65% increase compared to 1.836 billion yuan in the same period last year [1] - Equity funds showed strong performance, with net subscriptions of 2.373 billion yuan, accounting for 44.63% of total net subscriptions for non-monetary public funds, marking a 76.04% increase from 1.348 billion yuan year-on-year [1] - Bond funds emerged as the main contributors to net subscriptions, totaling 2.194 billion yuan, which represents 41.25% of the total net subscriptions for non-monetary public funds [1] Fund Type Breakdown - Among bond funds, medium- and long-term pure bond funds dominated with net subscriptions of 966 million yuan, making up 44.03% of the total bond fund subscriptions [3] - Passive index bond funds also performed well, with net subscriptions of 602 million yuan, accounting for 27.46% of bond fund subscriptions [3] - In the equity fund category, stock funds contributed significantly with net subscriptions of 1.328 billion yuan, representing 55.96% of total equity fund subscriptions [3] Management Performance - A total of 66 public fund managers recorded net subscriptions of at least 10 million yuan, indicating strong market confidence [4] - Among these, GF Fund stood out with a net subscription amount of 573 million yuan, accounting for 10.78% of the total net subscriptions by public fund managers [4] - Other notable fund managers included Huatai Securities Asset Management and Jianxin Fund, with net subscriptions of 409 million yuan and 396 million yuan, respectively [4] Self-Purchase Trends - The self-purchase trend among fund managers reflects their confidence in their investment research capabilities, with 64.27% of total net subscriptions attributed to managers with self-purchases of at least 10 million yuan [4] - The self-purchase mechanism is seen as a way to align the interests of fund managers and investors, particularly during market volatility [5] - However, it is noted that the confidence boost from self-purchases may have a time-limited effect [5] Long-term Considerations - Long-term market performance will ultimately depend on macroeconomic fundamentals and the profitability of listed companies, suggesting that reliance solely on self-purchases may not sustain investor confidence [6] - Investors will continue to prioritize actual returns and risk management levels, necessitating ongoing improvements in investment research capabilities and asset allocation strategies by fund managers [6]