Group 1 - The bond market is experiencing a downturn, with the 10-year government bond yield remaining above 1.8% since September, leading to a total return of only 0.78% for pure bond funds this year, which is lower than that of money market funds [1][2] - The recent simultaneous decline in both stock and bond markets is attributed to low risk-reward environments and ongoing concerns about potential new regulations, resulting in insufficient buying interest from investors [2][4] - The bond market's weakness is further exacerbated by year-end profit-taking demands from institutions, alongside a lack of significant short-term positive catalysts, leading to increased selling pressure [1][4] Group 2 - Historical analysis shows that significant adjustments in the bond market are often linked to economic expectations, policy shifts, and changes in trading structures, with past downturns indicating a pattern of recovery following each major decline [5][7] - The bond market has undergone five notable adjustments in the past five years, with each instance reflecting a re-evaluation of market conditions and investor sentiment [5][7] - Current market conditions suggest that while the bond market may remain in a narrow trading range in the short term, there is potential for improvement in the short-end supply-demand structure due to a clear supportive stance from the central bank [4][8] Group 3 - Investment strategies in the current bond market environment should focus on short to medium-duration bond funds, while maintaining a cautious stance on long-duration bonds until market trends become clearer [9][11] - The concept of "timing" in bond fund investment is less critical than ensuring a balanced asset allocation, as bonds inherently possess income-generating characteristics that can mitigate short-term volatility [8][9] - The introduction of "fixed income plus" strategies is recommended to enhance returns while managing risk, particularly in a fluctuating market [11][13]

Group 1: Characteristics of Interbank Certificate of Deposit Index Funds - The average yield of interbank certificate of deposit index funds is between that of money market funds and short-term bond funds, with a maximum drawdown of 0.18% and an annualized yield of 2.52% [1][8] - The underlying assets are primarily large-denomination deposits from banks, with the largest fund, "Huatai-PineBridge Interbank Certificate of Deposit Index 7-Day Holding," having 92% of its assets in interbank certificates [3] - Some funds may deviate from the norm, such as "Yimi Interbank Certificate of Deposit Index 7-Day Holding," which invested 19% in government bonds, although this is within the contractual limit of 20% for other investments [5] Group 2: Fund Performance and Management - As of 2024, the interbank certificate of deposit index has increased by 4.01% with a maximum drawdown of 0.06%, and only a few funds have outperformed this index [8][9] - The funds that have outperformed the index include "Chuangjin Hexin" and "Huatai-PineBridge," with respective yields of 4.17% and 4.07% [9] - The management fees for these funds are 0.2% annually plus a 0.05% custody fee, meaning a total of approximately 0.5% over two years [8] Group 3: Bond Fund Characteristics - The criteria for selecting bond funds include being a medium to long-term pure bond fund, with a maximum drawdown not exceeding 2% since 2021, and a yield exceeding 18% [10] - The "Medium to Long-Term Pure Bond Fund Index" has risen by 16.15% since 2021, with a maximum drawdown of 1.08% [10] - Notable funds that meet the criteria include "Penghua Fenglu" and "Southern Jinli," with respective yields of 29.80% and 32.47% [11] Group 4: Market Trends and Economic Indicators - The Federal Reserve's expectation for a rate cut in December has risen to 89.2%, influencing the recent rebounds in U.S. stocks, gold, and silver [22] - The potential appointment of Hassett as the new Fed Chair is seen as a positive for market liquidity, contributing to the strength of U.S. stocks and gold [25] - Concerns about market bubbles are highlighted, with current valuations being compared to historical highs, indicating a need for caution [25]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - As of the end of Q3 2025, the total number of active bond funds increased by 1.4% quarter-on-quarter, while the total fund size decreased by 3.5% quarter-on-quarter. Among them, the scale of hybrid secondary bond funds increased significantly by 61.1% [2][5][6]. - In Q3 2025, the yield of Treasury bonds increased, and the performance of short-term pure bond funds was better than that of medium and long-term pure bond funds. Driven by equity assets, secondary bond funds performed better [2][15][17]. - In terms of positions, medium and long-term pure bond funds, short-term bond funds, and hybrid primary bond funds all reduced leverage and duration. The bond positions of medium and long-term pure bond funds and short-term bond funds decreased, while the convertible bond positions of hybrid primary bond funds increased. Hybrid secondary bond funds increased their stock positions and decreased their bond positions, and increased their positions in sectors such as electronics, power equipment, and media [2]. Summary by Directory 1. Scale and Issuance of Active Bond Funds - **Scale Change**: As of the end of Q3 2025, the number of active bond funds was 3,349 (excluding amortized cost method funds), a quarter-on-quarter increase of 1.4%. The total fund size was 7.68 trillion yuan, a quarter-on-quarter decrease of 3.5%. Among them, the number of medium and long-term pure bond funds, hybrid primary bond funds, and hybrid secondary bond funds increased by 0.8%, 1.7%, and 3.8% respectively quarter-on-quarter, while the number of short-term pure bond funds decreased by 0.3% quarter-on-quarter. The scale of medium and long-term pure bond funds, short-term pure bond funds, and hybrid primary bond funds decreased by 11.1%, 18.0%, and 1.0% respectively, while the scale of hybrid secondary bond funds increased significantly by 61.1% quarter-on-quarter [5][6]. - **Fund Issuance**: In Q3 2025, 75 active bond funds were issued, an increase of 11 from the previous quarter, a growth rate of 17.2%. The total issuance scale was 50.41 billion yuan, a quarter-on-quarter decrease of 39%. Among them, the issuance scale of medium and long-term pure bond funds and short-term pure bond funds decreased compared with the previous quarter, while the issuance scale of hybrid primary bond funds and hybrid secondary bond funds increased by 37.8% and 39.5% respectively quarter-on-quarter [10][12]. 2. Performance of Active Bond Funds - **Treasury Yield Increase**: In Q3 2025, the yields of 1-year, 3-year, 5-year, 7-year, 10-year, and 30-year Treasury bonds increased by 3bp, 12bp, 10bp, 16bp, 22bp, and 39bp respectively. Against the background of rising interest rates, the performance of medium and long-term pure bond funds was poor. The yield of the short-term pure bond fund index was 0.16%, and the yield of the medium and long-term pure bond fund index was -0.37% [15]. - **Better Performance of Equity-Containing Products**: Driven by equity assets in Q3 2025, secondary bond funds performed better. The yield of the hybrid primary bond fund index was 0.64%, with a maximum drawdown of -0.50%; the yield of the hybrid secondary bond fund index was 3.18%, with a maximum drawdown of -0.73% [17]. 3. Position Analysis of Active Bond Funds - **Medium and Long-Term Pure Bond Funds**: Reduced leverage and duration, and bond positions generally decreased. Both closed - end and open - end medium and long-term pure bond funds reduced their positions in interest rate bonds, credit bonds, and financial bonds [20][26][28]. - **Short-Term Bond Funds**: Reduced leverage and duration, and the financial bond position decreased. The bond position and the weighted duration of the top five heavy - held bonds also decreased [35][37][42]. - **Hybrid Primary Bond Funds**: Reduced leverage and duration, and the convertible bond position increased. The leverage ratio and bond position decreased, while the convertible bond position increased [44][46][48]. - **Hybrid Secondary Bond Funds**: - **Asset Allocation**: The bond position decreased, and the stock position increased. The median convertible bond position decreased compared with the end of the previous quarter [56][58]. - **Industry Distribution of Heavy - Held Stocks**: In Q3, sectors such as electronics, power equipment, and media were increased, while sectors such as banks, public utilities, and transportation were reduced [63]. - **Heavy - Held Stocks**: Zijin Mining was the largest heavy - held stock, and the heavy - held scale of the top ten heavy - held stocks increased. Stocks such as CATL and Alibaba - W were increased significantly, while stocks such as Yangtze Power and China Merchants Bank were reduced [67][68].

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].