Core Viewpoint - The macroeconomic landscape at the beginning of 2026 is complex, showcasing a resilient picture of the domestic economy that is progressing towards improvement, contrasting with the market's focus on "structural differentiation" [1] Economic Overview - The domestic economy is advancing under pressure, with ongoing construction of a modern industrial system and positive progress in risk mitigation in key areas, despite challenges such as insufficient domestic demand and low price levels [4] - The U.S. economy is experiencing moderate expansion, with slowing job growth and a slight increase in unemployment, while inflation remains high, prompting the Federal Reserve to continue lowering interest rates [4] Market Indicators - In Q4 2025, the manufacturing PMI improved from 49 to 50.1, indicating marginal improvement [4] - External trade demonstrated strong resilience, with continuous enhancement in export competitiveness [4] - The real estate market in some cities is stabilizing but still exhibits volatility [4] - Monetary policy maintained a reasonably ample liquidity environment to support economic recovery, with average DR001 and DR007 rates decreasing by 15 basis points and 3 basis points respectively compared to Q3 2025 [4] Bond Market Performance - The yield on 10-year government bonds slightly decreased from 1.86% at the end of Q3 2025 to 1.85% in Q4 2025, showing minimal change [4] - The fund manager adjusted leverage and duration according to market conditions during this period, aiming to ensure safety while striving for stable returns for clients [4]

Core Viewpoint - The macroeconomic landscape at the beginning of 2026 is complex, showcasing a resilient picture of the domestic economy that is progressing steadily towards improvement, contrasting with the market's focus on "structural differentiation" [1] Economic Overview - The domestic economy is advancing under pressure, with ongoing construction of a modern industrial system and positive progress in risk mitigation in key areas, although challenges such as insufficient domestic demand and low price levels persist [4][9] - The U.S. economy is experiencing moderate expansion, with slowing job growth and a slight increase in unemployment, while inflation remains high and the Federal Reserve continues to lower interest rates [4][9] Market Indicators - In Q4, the manufacturing PMI improved from 49 to 50.1, indicating marginal improvement [4][9] - External trade shows strong resilience, with continuous enhancement in export competitiveness [4][9] - Some cities' real estate markets are stabilizing but still exhibit volatility during the recovery phase [4][9] - The average rates for DR001 and DR007 were 1.33% and 1.47%, respectively, down by 15 basis points and 3 basis points compared to Q3 2025 [4][9] - The yield on 10-year government bonds slightly decreased from 1.86% at the end of Q3 2025 to 1.85% [4][9] Fund Management Strategy - The fund manager adjusted leverage and duration based on market conditions during this period, aiming to ensure safety while striving for stable returns for clients [4][9]

Core Viewpoint - The bond market is experiencing discussions amid a recovering economy, with structural characteristics becoming increasingly evident [1][6]. Economic Environment - Since the fourth quarter, the domestic macroeconomic performance has shown a weak yet stable trend, with GDP growth gradually declining throughout the year [3][8]. - Inflation recovery is exhibiting structural characteristics, with household sectors remaining a weak point in the economy [3][8]. Market Sentiment - Despite the economic shortfalls, the bond market's expectations for economic growth and inflation in the coming year have improved, supported by positive policy changes that have boosted market confidence [3][9]. Government Policies - The government's "anti-involution policy" aims to reduce ineffective competition and stabilize supply-side prices, particularly in certain industrial products, providing a clearer policy bottom for prices [9]. - Signals from important meetings in December indicate that broad fiscal spending is expected to maintain strength, with a policy tilt towards household sectors and service consumption, positively supporting market prospects [4][9]. External Factors - A temporary easing of geopolitical disturbances and the spillover effects of overseas policy easing are expected to continue supporting exports [4][9]. - Potential external inflation inputs are also providing support for the recovery of domestic price indicators, further enhancing market recovery expectations [4][9]. Market Dynamics - In the context of mixed fundamentals and liquidity, the influence of institutional behavior in the bond market has increased [4][9]. - Concerns about supply-demand imbalances in ultra-long bonds may negatively impact the bond market until clear support emerges, but there is no need for excessive worry about future supply issues given the reliance on government credit expansion and moderately loose monetary policy [4][9]. Investment Strategy - The fund's portfolio has been adjusted to a bullet structure at year-end, aiming to capitalize on curve convexity and riding opportunities to build a more robust portfolio structure for 2026 [4][9].