1. Report Industry Investment Rating There is no information provided about the report industry investment rating in the given content. 2. Core Viewpoints of the Report - Last week, interest - rate bonds fluctuated weakly, while credit bonds showed differentiated trends. High - grade credit bonds also weakened but with smaller declines. Short - duration medium - and low - grade bonds weakened, but the yields of 3 - 5Y bonds were still falling. The trading sentiment in the bond market cooled down. The central bank resumed trading in treasury bonds, but the scale was lower than expected. The strengthening of the equity market in the second half of the week made the bond market weaker. Ultra - long - term credit bonds also weakened, with only the yields of the least liquid ultra - long urban investment bonds showing a reverse recovery [2][10]. - Public funds have shown a significant trend of chasing longer durations for two consecutive weeks, mainly focusing on 3 - 5Y bonds. Other institutions such as wealth management and insurance have relatively stable demand for credit bonds. The behavior of public funds chasing longer durations may continue in the short term, driven by the concentrated opening of amortized cost method funds and the improving performance of credit ETF products [3][29][32]. - The "volatility amplifier" characteristic of Tier 2 capital bonds of banks (Two - Yong bonds) reappeared, with larger declines than general credit bonds and interest - rate bonds of the same duration. There is a small window period for short - term trading of Two - Yong bonds [4][16]. - In terms of strategies, it is still recommended to select bonds from weakly - qualified urban investment bonds with 3 - 5Y durations. It is not advisable to chase ultra - long - term credit bonds for short - term trading, but there is a small window period for short - term trading of Two - Yong bonds [4]. 3. Summary According to the Directory 3.1 Fund's Two Marginal Changes in Chasing Duration - **Bond Market Performance** - Interest - rate bonds fluctuated weakly last week, and credit bonds showed differentiation. From November 3 to 7, 2025, the yields of 1Y, 2Y, 3Y, 4Y, and 5Y treasury bonds increased by 2.2BP, 3.2BP, 3.0BP, 2.7BP, and 2.1BP respectively. The yields of AAA medium - term notes of the same duration increased by 1.2BP, 2.3BP, decreased by 0.5BP, increased by 1.6BP, and 0.2BP respectively. AA + medium - term notes' yields increased by 1.2BP, 0.3BP, decreased by 0.5BP, decreased by 2.4BP, and decreased by 2.8BP respectively [10][11]. - Ultra - long - term credit bonds weakened, with only the yields of the least liquid ultra - long urban investment bonds recovering. The yields of 10Y AAA/AA + medium - term notes increased by 1.01BP and 0.01BP respectively, the yields of 10Y AAA/AA + urban investment bonds increased by 0.86BP and decreased by 0.14BP respectively, the yield of 10Y AAA - bank secondary capital bonds increased by 9.29BP, and the yield of 10Y treasury bonds increased by 5.32BP [10]. - The "volatility amplifier" characteristic of Two - Yong bonds reappeared, with larger declines than general credit bonds and interest - rate bonds of the same duration. The yields of 1 - 5Y, 7Y, and 10Y AAA - bank secondary capital bonds increased by 2.94BP, 5.39BP, 4.35BP, 4.23BP, 4.16BP, 1.30BP, and 0.64BP respectively. The part of the curve above 4Y is still 30BP - 50BP away from the lowest yield point since 2025 [16]. - **Curve Shape** - The steepness of the 1 - 2Y and 2 - 3Y segments of all - grade bonds is the highest, and the steepness of the 3 - 5Y segment of low - grade bonds is also relatively high, but it has been decreasing for two consecutive weeks. For example, for AA + medium - term notes, the slopes of the 1 - 2Y, 2 - 3Y, and 3 - 5Y segments are 0.0909, 0.1109, and 0.0605 respectively; for AA urban investment bonds, the slopes are 0.1231, 0.1236, and 0.0953 respectively [12]. - **Historical Quantiles of Yields and Credit Spreads** - The protection margin of general credit bonds within 5Y is thin, and the cost - effectiveness of credit bonds is currently not high. From November 3 to 7, 2025, the yields of 1Y - AAA, 3Y - AAA, 5Y - AAA, 1Y - AA +, 3Y - AA +, 5Y - AA +, 1Y - AA, and 3Y - AA medium - and short - term notes are at the 12.52%, 24.62%, 23.75%, 8.42%, 18.57%, 17.27%, 5.39%, and 9.50% levels since 2024 respectively. The historical quantiles of credit spreads are at the 2.64%, 0.22%, 2.20%, 1.98%, 0.22%, 2.64%, 0.66%, and 6.40% levels respectively [14]. - **Trading Activity** - For Two - Yong bonds, the buying power was strong in the first half of the week but weakened significantly in the second half. From November 3 to 7, the proportion of transactions below the valuation was 100.00%, 100.00%, 100.00%, 2.50%, and 12.50% respectively; the average trading durations were 6.95 years, 6.67 years, 6.51 years, 0.91 years, and 0.85 years respectively. The trading volume below the valuation was generally low, with only 2 transactions having a margin of more than 4BP, and the rest within 3BP [18]. - For ultra - long - term credit bonds, the selling volume increased in the second half of the week, and the focus of discounted transactions was on weakly - qualified urban investment bonds. From November 3 to 7, the proportion of discounted transactions was 5.00%, 2.50%, 5.00%, 85.00%, and 35.00% respectively. The discount margin was generally within 4BP, and about 15% of the transactions had a margin of more than 4BP, mainly weakly - qualified urban investment bonds [23]. - The trading activity of ultra - long - term credit bonds decreased marginally. From November 3 to 7, the proportion of transactions below the valuation was 32.50%, 52.50%, 57.50%, 10.00%, and 20.00% respectively. About 47% of the transactions below the valuation had a margin of 4BP or more, mainly 2 - 5Y AA(2) and AA weakly - qualified urban investment bonds, whose liquidity has improved recently [25]. - **Institutional Behavior** - Public funds have shown a significant trend of chasing longer durations for two consecutive weeks, mainly focusing on 3 - 5Y bonds. Last week, funds net - bought 181.17 billion yuan of 1 - 3Y credit bonds, 110.48 billion yuan of 3 - 5Y credit bonds, and 31.96 billion yuan of 7 - 10Y credit bonds. Wealth management's buying of credit bonds slowed down, mainly net - buying 25.66 billion yuan of 1 - 3Y credit bonds. Insurance's buying of general credit bonds was relatively stable, net - buying 32.65 billion yuan of 1 - 3Y credit bonds and 26.56 billion yuan of 3 - 5Y credit bonds [3][29]. - The behavior of public funds chasing longer durations may continue in the short term. On one hand, the concentrated opening of amortized cost method funds may support the 3 - 5Y credit bond market. The expected opening scale of these funds in the second half of November and December is 328.62 billion yuan and 1,238.55 billion yuan respectively, and the proportion of funds with a closed - end period of more than three years is 80.96% and 65.68% respectively. On the other hand, the improving performance of credit ETF products, especially the second - batch of science and technology innovation ETFs, may also drive public funds to chase longer durations. The cumulative losses of credit market - making ETFs are decreasing, and most science and technology innovation ETFs have achieved positive cumulative net values. The trading duration of credit ETF products has been lengthening recently, with strong buying of 3 - 5Y and over - 5Y component bonds [32][33].

1. Report Industry Investment Rating The provided content does not mention the industry investment rating. 2. Core View of the Report - Last week, interest - rate bonds fluctuated weakly, while credit bonds showed a differentiated trend. High - grade credit bonds also weakened but with smaller declines, and medium - and low - grade short - duration bonds weakened, yet the yields of 3 - 5Y bonds continued to decline. The trading sentiment in the bond market cooled down, and the bond market became weaker as the equity market strengthened in the second half of the week. The market for ultra - long - term credit bonds also weakened, with only the yields of ultra - long - term urban investment bonds with the weakest liquidity recovering inversely [2][10]. - The "volatility amplifier" characteristic of secondary - tier perpetual bonds reappeared, with a larger decline than that of general credit bonds and interest - rate bonds of the same term. The yields of 1 - 5Y, 7Y, and 10Y AAA - bank secondary capital bonds increased by 2.94BP, 5.39BP, 4.35BP, 4.23BP, 4.16BP, 1.30BP, and 0.64BP respectively [3][16]. - Public funds have shown a significant trend of chasing long - duration bonds for two consecutive weeks, mainly focusing on 3 - 5Y bonds. Other institutions such as wealth management and insurance have relatively stable demand for credit bonds. The behavior of public funds chasing long - duration bonds may continue in the short term, influenced by the concentrated opening of amortized - cost - method funds and the improved performance of credit ETF products [3][4][29]. - The strategy still recommends selecting bonds from weakly - qualified urban investment bonds with a 3 - 5Y term. For trading positions, it is not recommended to chase ultra - long - term credit bonds in band operations. However, there is a small window period for band operations of secondary - tier perpetual bonds recently, as the adjustment range of secondary - tier perpetual bonds was relatively large last week, and the yields of medium - and high - grade 4 - 5Y bonds are currently in a relatively safe range after adding points [5][38]. 3. Summary According to Relevant Catalogs 3.1 Fund's Two Marginal Changes in Chasing Long - Duration Bonds - **Bond Market Performance**: From November 3 to November 7, 2025, the yields of 1Y, 2Y, 3Y, 4Y, and 5Y treasury bonds increased by 2.2BP, 3.2BP, 3.0BP, 2.7BP, and 2.1BP respectively. The yields of AAA medium - and short - term notes of the same term increased by 1.2BP, 2.3BP, decreased by 0.5BP, increased by 1.6BP, and 0.2BP respectively. The yields of AA + medium - and short - term notes increased by 1.2BP, 0.3BP, decreased by 0.5BP, 2.4BP, and 2.8BP respectively. The yields of ultra - long - term credit bonds also weakened, except for the inverse recovery of the yields of ultra - long - term urban investment bonds with the weakest liquidity [10][11]. - **Curve Shape**: The steepness of the 1 - 2Y and 2 - 3Y segments of all grades is the highest, and the steepness of the 3 - 5Y segment of low - grade bonds is also relatively high, but it has been decreasing for two consecutive weeks. Taking the yield term structure diagrams of AA + medium - term notes and AA urban investment bonds as examples, the slopes of the 1 - 2Y, 2 - 3Y, and 3 - 5Y segments of AA + medium - term notes are 0.0909, 0.1109, and 0.0605 respectively; those of AA urban investment bonds are 0.1231, 0.1236, and 0.0953 respectively [12]. - **Institutional Behavior**: Public funds have shown a significant trend of chasing long - duration bonds for two consecutive weeks, mainly focusing on 3 - 5Y bonds. Last week, funds net - bought 181.17 billion yuan of 1 - 3Y credit bonds, 110.48 billion yuan of 3 - 5Y credit bonds, and 31.96 billion yuan of 7 - 10Y credit bonds. The buying intensity of wealth management products for credit bonds slowed down last week, mainly net - buying 25.66 billion yuan of 1 - 3Y credit bonds. Insurance companies' buying intensity for general credit bonds has been relatively stable in the past two weeks, net - buying 32.65 billion yuan of 1 - 3Y credit bonds and 26.56 billion yuan of 3 - 5Y credit bonds [3][29]. - **Reasons for Chasing Long - Duration Bonds**: Firstly, affected by the concentrated opening of amortized - cost - method funds, the demand for credit - bond allocation of such funds has increased significantly this year. The scale of funds expected to open in the fourth quarter is large, and the proportion of products with a long - term closed - end period is high, which may support the 3 - 5Y credit - bond market. Secondly, the market of credit ETF products has improved recently, with the net - worth performance improving and the trading duration lengthening, which may also drive public funds to chase long - duration bonds [4][32][33]. 3.2 Secondary - Tier Perpetual Bonds - **Yield Changes**: The "volatility amplifier" characteristic of secondary - tier perpetual bonds reappeared, with a larger decline than that of general credit bonds and interest - rate bonds of the same term. The yields of 1 - 5Y, 7Y, and 10Y AAA - bank secondary capital bonds increased by 2.94BP, 5.39BP, 4.35BP, 4.23BP, 4.16BP, 1.30BP, and 0.64BP respectively. The yields of the part above 4Y are still 30BP - 50BP away from the lowest point since 2025, and the adjustment range is higher than that of the sharp decline at the end of July [3][16]. - **Trading Activity**: In the first half of the week, the buying power was strong, but it weakened significantly in the second half of the week. From November 3 to November 7, the proportion of transactions below the valuation of secondary - tier perpetual bonds was 100.00%, 100.00%, 100.00%, 2.50%, and 12.50% respectively; the average trading duration was 6.95 years, 6.67 years, 6.51 years, 0.91 years, and 0.85 years respectively. The amplitude of transactions below the valuation was generally low last week [18]. 3.3 Ultra - Long - Term Credit Bonds - **Trading Volume and Price**: The selling volume of ultra - long - term credit bonds increased in the second half of last week, and the focus of discounted transactions was on weakly - qualified urban investment bonds. From November 3 to November 7, the proportion of discounted transactions of ultra - long - term credit bonds was 5.00%, 2.50%, 5.00%, 85.00%, and 35.00% respectively. The discount amplitude was generally within 4BP, and about 15% of the discount amplitude was above 4BP, mainly from weakly - qualified urban investment bonds [23]. - **Trading Activity Below Valuation**: The trading activity of ultra - long - term credit bonds below the valuation decreased marginally. From November 3 to November 7, the proportion of transactions below the valuation was 32.50%, 52.50%, 57.50%, 10.00%, and 20.00% respectively. About 47% of the transactions below the valuation had an amplitude of 4BP or more, mainly from 2 - 5Y AA(2) and AA weakly - qualified urban investment bonds, whose liquidity has improved recently [25][27].