Core Viewpoint - As of August 19, the total margin balance for ETFs in the Shanghai and Shenzhen markets reached 106.27 billion yuan, reflecting an increase of 2.914 billion yuan from the previous trading day [1] Group 1: ETF Financing and Margin Balances - The ETF financing balance stood at 99.855 billion yuan, up by 2.877 billion yuan compared to the previous trading day [1] - The ETF margin short-selling balance was recorded at 6.415 billion yuan, which is an increase of 0.037 billion yuan from the previous trading day [1] Group 2: Net Inflows in ETFs - On August 19, a total of 239 ETFs experienced net financing inflows, with the top net inflow being 1.444 billion yuan for the Fortune China Government Bond 7-10 Year Policy Financial Bond ETF [1] - Other ETFs with significant net inflows included the Hai Fu Tong CSI Short-term Bond ETF, Bosera 0-3 Year National Development Bank ETF, Pengyang 30-Year National Bond ETF, Guotai CSI All-Share Securities Company ETF, and Guotai Shanghai Stock Exchange 10-Year National Bond ETF, each with net inflows exceeding 100 million yuan [1]

Report Industry Investment Rating No information provided. Core Viewpoints of the Report - The bond bull market is not over yet as the economic recovery pace is slowing down, inflation has limited upward elasticity, and the growth of social financing is weakening in the second half of 2025 [1][15]. - In the context of a long - term low - interest - rate environment and low credit spreads in China, the duration strategy becomes crucial in bond investment, and 10 - year treasury bonds are a relatively balanced choice [2]. - It is advisable to invest in long - duration treasury bond ETFs. Bond - type passive products are in the fast lane of development, and the 10 - year treasury bond ETF is a powerful tool for investors [3]. Summary by Relevant Catalogs 1. Observing the Situation: Economic Recovery Pace Slows Down, Bond Bull Market Continues - **2025 H1 Bond Market Performance**: The bond market first declined and then rose, with the turning point in March. From the beginning of the year to mid - March, it adjusted significantly due to exchange - rate stabilization and tight funds. In late March, it recovered due to tariff frictions. In April and May, it was affected by the central bank's double cuts and the Geneva talks, showing an overall oscillatory upward trend. In June, it oscillated downward and strengthened slightly with the central bank's signal of liquidity support [1][12][13]. - **2025 H2 Economic Outlook**: The economic recovery slope is likely to slow down, mainly because the "export rush" in H1 may lead to an overdraft effect on H2 exports, consumption may lose policy support, and the real - estate investment has not shown significant improvement. Prices are at the bottom with limited upward elasticity, and the social financing stock growth rate is likely to decline in Q3 and Q4 [15][21][22]. 2. Trend: Low - Interest - Rate Environment, Duration is King - **Long - Term Low - Interest - Rate Environment**: China's economic transformation and demographic changes are likely to lead to a long - term low - interest - rate environment. The decline in the traditional economic driving forces and the imbalance between capital supply and demand caused by population aging are the main reasons [28]. - **Importance of Duration Strategy**: In a low - interest - rate environment, adding long - duration bonds is the core to obtain term premiums. Compared with short - term and ultra - long - term treasury bonds, 10 - year treasury bonds have relatively balanced performance in terms of return and risk. Among different bond types, treasury bonds have advantages in terms of tax and liquidity [2][31][40]. 3. Seizing the Opportunity: Allocating Long - Duration Treasury Bond ETFs - **Development of Bond ETFs**: The performance gap between active and passive bond products is narrowing, and the bond - type passive products are in a golden development period. The scale of bond ETFs has reached new highs this year. Compared with overseas markets, domestic bond ETFs have broad development space [3][44][45]. - **Advantages of Bond ETFs**: Bond ETFs have lower fees, higher transparency, and more flexible trading mechanisms. They support T + 0 trading, can be leveraged through pledge, and have lower management and custody fees [3][50]. - **10 - Year Treasury Bond ETF**: It is the only 10 - year treasury bond ETF in the domestic market, providing a powerful tool for investors to invest in 10 - year treasury bonds. Managed by Wang Yu and Wang Zhenyang, it has excellent historical performance and good liquidity [3][57][60]. - **Cathay Fund**: As an ETF pioneer, Cathay Fund has a rich variety of ETF products, covering different asset classes. As of July 18, 2025, it has 69 ETFs with a total scale of 186.626 billion yuan, providing investors with a wide range of choices [66].

1. Report Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Core Viewpoints of the Report - The bond market is still in a long - position channel in the second half of 2025. The exchange - rate constraint has weakened significantly. With the coordinated efforts of monetary and fiscal policies, liquidity is expected to remain loose. The decline in institutional liability costs is expected to bring incremental funds to the bond market. The weak economic fundamentals suggest a low possibility of short - term fiscal policy intensification, and inflation improvement may occur in the fourth quarter [1]. - The allocation value of 10 - year treasury bonds is prominent. They are suitable for asset allocation, with better market depth and breadth. Compared with medium - short - term and ultra - long - term treasury bonds, they have advantages in duration and risk - return ratio [1]. - The Shanghai Stock Exchange 10 - year Treasury Bond Index can connect treasury bond futures and spot markets. It has high return stability, low volatility, and low risk [1]. - The Guotai Shanghai Stock Exchange 10 - year Treasury Bond ETF has investment value, including low fees, good tracking effect, scarcity, diverse trading mechanisms, and excellent investment performance [1]. 3. Summary by Directory 3.1 Bond Market Review and Future Outlook 3.1.1 Review of the Interest - Rate Bond Market in the First Half of 2025 - The yield curve of treasury bonds first experienced a "bear - flat" and then a "bull - flat" trend. In Q1 2025, long - term bonds corrected due to tightened funds and bank liability pressure. In April 2025, the bond market quickly turned bullish. From May to June 2025, after the yield declined to a low level, the focus was on exploring spreads [7]. - The bond market in 2025 has three new features: the central bank's policy rate is the bottom of the money market; short - term bonds perform weakly, and long - term bonds are difficult to trade; the overall fundamentals are stable, but tariff pulses have a large impact [13]. 3.1.2 The Bond Market Remains in a Long - Position Channel in the Second Half of 2025 - Liquidity is expected to remain loose in July. The decline in institutional liability costs will bring incremental funds to the bond market, including the reset of bank time deposits and the potential reduction of insurance product preset interest rates [17][21]. - The weak economic fundamentals suggest a low possibility of short - term fiscal policy intensification. Inflation may bottom out in the third quarter, and improvement may occur in the fourth quarter. The bond market is still in a long - position window, but the odds are limited, and the current trading logic may continue to focus on exploring spreads [1][29]. 3.1.3 The Allocation Value of 10 - Year Treasury Bonds is Prominent - 10 - year treasury bonds are suitable for asset allocation as their pricing is based on fundamentals, and their pricing logic is different from that of stocks and commodities [37]. - The 10 - year treasury bond market has better depth and breadth, with large scale, wide participation, high trading activity, and a good futures - spot linkage effect. Its market position may be further consolidated in the future [45]. - Compared with medium - short - term treasury bonds, 10 - year treasury bonds have duration offensive advantages and a coupon safety cushion. Compared with ultra - long - term treasury bonds, they have a better risk - return ratio [49][57]. 3.2 Shanghai Stock Exchange 10 - Year Treasury Bond Index: A Bridge Connecting Treasury Bond Futures and Spot Markets 3.2.1 Index Compilation Scheme - The index was launched on March 7, 2013. Its sample bonds are treasury bonds listed on the Shanghai Stock Exchange with a remaining maturity between 6.5 and 10.25 years. It uses market - value weighting to reflect the overall performance of treasury bonds in the corresponding maturity range in the Shanghai market [64]. - The specific compilation scheme includes sample bond selection, index calculation, and sample adjustment (regular and temporary adjustments) [67]. 3.2.2 Basic Index Features - The index has high return stability, low volatility, and low risk. Since the base period, its cumulative return has reached 85.76%, with an annualized return of 4.82%, a maximum drawdown of - 6.86%, and an annualized volatility of 2.87% [71]. - All sample bonds are deliverable bonds for T contracts. The index has high concentration, and its duration is generally between 7 and 7.4 years, currently at 7.61 years [74][78]. 3.3 Guotai Shanghai Stock Exchange 10 - Year Treasury Bond ETF 3.3.1 Basic Information - The fund was established on August 4, 2017, by Guotai Fund, with Wang Yu and Wang Zhenyang as fund managers. As of July 18, 2025, its scale is 15.547 billion yuan. The management fee and custody fee are 0.15% and 0.05% respectively [80]. - It is one of the bond funds with the lowest fees, and as an on - exchange product, it does not charge subscription or redemption fees [83]. 3.3.2 Investment Method - The fund mainly invests in the constituent treasury bonds and alternative constituent treasury bonds of the target index (with a proportion of not less than 90% of the fund's net asset value). It uses an optimized sampling replication method to track the target index, aiming for an annualized tracking error of no more than 2%. Since its establishment, the annualized tracking error has been 1.43% [84][87]. 3.3.3 The Only Product Tracking the Shanghai Stock Exchange 10 - Year Treasury Bond Index in the Market - Currently, most domestic interest - rate bond index funds cover policy - financial bond indices, and long - duration interest - rate bond indices and treasury bond indices are relatively scarce. The Guotai Shanghai Stock Exchange 10 - Year Treasury Bond ETF is the only product tracking the Shanghai Stock Exchange 10 - year Treasury Bond Index, with scarcity [91]. 3.3.4 Trading Mechanism - The fund can be traded on the secondary market, and its IOPV is publicly announced, supporting T + 0 trading. It has sufficient liquidity, and the deviation between IOPV and trading price is low [97]. - The fund also supports physical redemption and has a pledge - repurchase business, with a current conversion ratio of about 94.48%, which meets the refinancing needs of investors [102]. 3.3.5 Investment Performance - Since its establishment, the fund has an annualized return of 4.01%, a maximum drawdown of - 4.56%, an annualized volatility of 2.45%, a Calmar ratio of 0.88, and a Sharpe ratio of 1.03. It has achieved positive returns for six consecutive years, and its maximum annual drawdown is generally no more than 3% [103]. - In the past three years, its return has led 92.30% of interest - rate bond index funds [107]. 3.4 Fund Manager Information 3.4.1 Fund Manager Introduction - Guotai Fund was established in March 1998, one of the first batch of standardized fund management companies in China. It has a complete product line and various business qualifications, with a total asset management scale of 114.34 billion yuan [111]. 3.4.2 Fund Manager Introduction - Wang Yu has a master's degree, joined Guotai Fund in January 2016, and currently manages 10 products with a total scale of 23.148 billion yuan [112]. - Wang Zhenyang has a master's degree, joined Guotai Fund in December 2024, and currently manages 4 products with a total scale of 23.302 billion yuan [115].

Group 1 - The core point of the news is the recent performance of the Cathay SSE 10-Year Treasury ETF, which has seen a decline of 0.26% on July 24, with a cumulative drop of 0.57% over five consecutive trading days [1] - The Cathay SSE 10-Year Treasury ETF was established in August 2017, with a fund size of 14.232 billion yuan and a cumulative return of 35.93% since inception [1] - As of the end of 2024, institutional investors hold 0.1 million shares, accounting for 53.90% of the total shares, while individual investors hold 0.09 million shares, making up 46.10% of the total [1] Group 2 - The current fund manager, Wang Yu, has a master's degree and has been with Cathay Fund Management since January 2016, serving in various roles including fund manager for multiple funds [2] - Wang Zhenyang, another current fund manager, joined Cathay Fund in December 2024 and has held various positions in the company [2] - The fund manager, Ai Xiaojun, has extensive experience in quantitative analysis and has managed several funds since joining Cathay Fund in October 2007 [2][3] Group 3 - As of June 30, 2025, the top five holdings of the Cathay SSE 10-Year Treasury ETF account for a total of 64.18%, with the largest holding being 25 Treasury Bond 07 at 17.67% [3]

Group 1 - The core point of the article highlights the changing dynamics in FOF (Fund of Funds) investments, particularly the decline in holdings of gold ETFs, despite their popularity among fund managers [1][2] - As of the end of Q2 2025, the Huazhong Gold ETF has the highest number of FOF holdings, totaling 78, with a market value of 987 million yuan [1] - The top five funds with the most FOF purchases include Huazhong Gold ETF, Hai Futong Zhongzheng Short Bond ETF, Pengyang Zhongzheng 30-Year Treasury ETF, and others, indicating a shift in investment focus [2] Group 2 - The article discusses the performance of FOFs, noting that several funds have achieved over 20% returns year-to-date, with specific funds like Guotai Preferred Navigation and ICBC Smart Progress leading the way [4][5] - Fund managers are adopting a proactive investment strategy, focusing on sectors such as Hong Kong technology, innovative pharmaceuticals, and A-share new productivity themes, which are driving net asset value growth [3][6] - The outlook for the market suggests a focus on industry rotation opportunities, with key investment themes including rare earths, innovative pharmaceuticals, resource commodities, and the financial real estate sector [6][7]

1. Report Industry Investment Rating No information provided in the given content. 2. Core View of the Report - In the low - interest - rate era, "extending duration" and "controlling costs" are two key strategies for bond investment. The public - offering bond funds are shifting from "credit downgrading" to "duration management", and the low - cost advantage of bond - fund indexation is prominent [1][2]. - Long - duration index bond funds are the best combination of "high duration" and "low cost". Different types of long - duration index bond funds have different risk - return characteristics, and investors can choose according to their needs [3]. - Ten - year Treasury bond ETFs are effective "offensive - and - defensive" tools for enhancing portfolio returns, and are also suitable for short - term trading and rotation strategies [7]. 3. Summary According to the Directory 3.1 Low - Interest - Rate Era: "Extending Duration" and "Controlling Costs" as Two Key Strategies - Since early 2014, domestic interest rates have been in a downward cycle, and the upward elasticity of interest rates has weakened. From 2015 to 2025, the market has experienced five rounds of local government debt resolution, gradually flattening the credit spread [1][12][13]. - Facing the "low - interest - rate + low - spread" environment, public - offering bond funds are shifting from "credit downgrading" to "duration management". The average allocation ratio of medium - and long - term bond funds to credit bonds has dropped from 41% in 2020 to 30% at the end of Q1 2025, while the acceptance of portfolio duration is increasing [1][20][21]. - Referring to overseas experience, in a low - interest - rate environment, Japanese public - offering bond funds have increased their allocation to long - term bonds. In terms of risk - return ratio, the cost - effectiveness of long - duration strategies has become prominent since 2021 [27][32]. - Passive index - type bond funds have a cost - saving advantage of about 11 - 15bp per year compared with actively managed products, which is a relatively certain "hidden alpha" for investors [2][33]. 3.2 Long - Duration Index Bond Funds: The Best Combination of "High Duration" and "Low Cost" 3.2.1 Choices of Long - Duration Index Tools - Mainstream long - duration index bond funds are divided into three categories: local government bonds, Treasury bonds, and policy - financial bonds, and can be further divided into "long - term tools" (7 - 10 years and 10 years) and "ultra - long - term tools" (30 years) [3][48]. - Among them, the 10 - year index - type bond funds mainly hold bonds with a remaining term of 7 - 10 years, similar to 7 - 10 - year products. The 7 - 10 - year policy - financial bond index funds are the most popular, while the local bond index funds are scarce [48][49]. 3.2.2 Differences in the Long - Duration Index Toolbox - From the duration dimension, the 10 - year and 30 - year Treasury bonds have significant differences in risk - return characteristics, corresponding to the "ballast" and "offensive spear" roles respectively. The 10 - year Treasury bond is suitable for stable long - term investment, while the 30 - year Treasury bond is suitable for aggressive investors [54]. - From the bond type dimension, 7 - 10 - year policy - financial bonds are similar to Treasury bonds, while local bonds have unique characteristics. Although the long - term performance of 7 - 10 - year local bonds is good, investors may need more patience. The investment value of Treasury bonds and policy - financial bonds is converging [55][56][61]. 3.3 Investment Strategies for Long - Duration Index Bond Funds 3.3.1 Allocation: Enhancing Portfolio Returns, "Offensive and Defensive" - Ten - year Treasury bond ETFs are effective "offensive - and - defensive" tools for enhancing portfolio returns. In the interest - rate downward cycle, they have excellent return - capturing ability, such as the 9.02% annual return of Cathay Shanghai Stock Exchange 10 - Year Treasury Bond ETF in 2024 [7][65]. 3.3.2 Trading: Capturing Band - Trading Returns from "Point - Type Market Conditions" - Long - duration index products represented by ten - year Treasury bond ETFs have high liquidity and trading convenience, and are suitable for capturing band - trading returns from "point - type market conditions" in the bond market, such as the rapid decline and rebound of the 10 - year Treasury bond yield from November 2024 to January 2025 [7]. 3.3.3 Important Tools in Rotation Strategies - A "core - satellite" strategy is proposed, using long - duration interest - rate bond ETFs as the core "base" for pure - bond rotation, and tactically adjusting the satellite positions according to short - term market conditions. Back - testing shows that the improved rotation strategy can enhance returns and has better risk - adjusted returns [7][77][80].

Market Overview - Last Friday, the market experienced a mixed performance with the three major indices showing varied results, as the Shanghai Composite Index briefly rose over 1% approaching 3500 points [1] - Sectors that performed well included stablecoins, gaming, banking, and electricity, while sectors such as solid-state batteries, beauty care, rare earth permanent magnets, and non-ferrous metals saw declines [1] ETF Market Activity - On July 4, the non-monetary ETF market saw significant inflows, with notable increases in fund shares and net inflows for several ETFs: - Hai Fu Tong Zhong Zheng Short Bond ETF saw an increase of 0.07 million shares with a net inflow of 0.825 billion yuan - Hua Xia Hang Seng Technology ETF had an increase of 9.7 million shares with a net inflow of 0.682 billion yuan - Guotai Shangzheng 10-Year Treasury ETF increased by 0.05 million shares with a net inflow of 0.634 billion yuan [1][2] Top Performing ETFs - The top ETFs by net inflow on July 4 included: - Hai Fu Tong Zhong Zheng Short Bond ETF with a net inflow of 1.637 billion yuan for the month - Fu Guo Zhong Zheng Hong Kong Stock Connect Internet ETF with a net inflow of 1.51 billion yuan - Yi Fang Da Shang Zheng Benchmark Market Maker Corporate Bond ETF with a net inflow of 1.455 billion yuan [3] Fund Performance - The overall ETF market as of July 4 had a total of 27,411.52 million shares and a total scale of 43,178.96 billion yuan - The financial sector saw the largest increase in fund shares, with 23 funds tracking this theme, while the index tracking Zhong Zheng Bank saw a 51.61% increase in shares [3]

Core Insights - The domestic ETF market experienced significant growth in the first half of 2025, with total ETF assets surpassing 4 trillion yuan, increasing from 3.73 trillion yuan at the beginning of the year to 4.31 trillion yuan by mid-year [1][2] - Several new and existing ETFs gained substantial inflows, with notable contributions from major fund companies such as Huaxia Fund, E Fund, and Fuguo Fund, which added 928.32 billion yuan, 648.66 billion yuan, and 513.71 billion yuan respectively [1][2] - The focus of ETF fund managers is shifting from brand promotion to achieving scale, driven by new policies and regulatory guidance [7][8] ETF Market Growth - The total scale of domestic ETFs reached over 4 trillion yuan for the first time, with an increase of over 580 billion yuan in the first half of 2025 [1] - Eight public fund institutions added between 20 billion yuan and 50 billion yuan in ETF management scale, while ten institutions added between 5 billion yuan and 20 billion yuan [2] - The market saw multiple standout products across various sectors, indicating a broad-based growth in ETF inflows [2] Performance of Existing Products - Several existing ETFs revitalized their performance, with the Huaxia Gold ETF and Fuguo China-Hong Kong Internet ETF seeing net inflows of 311.47 billion yuan and 257.27 billion yuan respectively [3] - Other ETFs, such as the Industrial Bank China-Hong Kong Technology ETF and Huaxia China-Robotics ETF, also experienced significant scale increases, each exceeding 100 billion yuan [3] New Product Launches - The first batch of benchmark market-making credit bond ETFs gained attention, with several funds exceeding 20 billion yuan in scale by mid-year [4] - Existing products like the Hai Futong China Short-term Bond ETF also saw substantial growth, with nearly 20 billion yuan added in the first half of the year [4] Strategic Focus of Fund Managers - Fund managers are advised to focus on innovative potential products and maintain a robust marketing strategy to capture market share [8] - The competitive landscape is expected to continue, with leading products maintaining an advantage due to their established resources and market presence [7][8]

Group 1 - The report indicates a slight decrease in leverage in the interbank bond market, with a mixed performance in the primary market and overall positive sentiment in the secondary market, leading to an increase in bond duration and active trading of ultra-long bonds [2][4][7] - In the funding market, the demand for expansion has cooled, with a decrease in net inflow for major borrowing parties and an increase in net inflow for major lending parties. The total balance of repos in the interbank market has risen, while the leverage ratio has slightly decreased [4][7][8] - The primary market saw a divergence in bidding multiples, with a rise in the bidding multiple for 10-year government bonds, while the multiples for policy bonds decreased. The spread between primary and secondary prices has widened [17][19] Group 2 - The secondary market has shown active trading in ultra-long bonds, with an increase in turnover rates for 30-year government bonds and a rise in the average duration of medium- and long-term pure bond funds. The total borrowing volume for bonds has decreased, and the proportion of active bonds has also declined [26][30] - Major buyers have increased net purchases of ultra-long bonds, while net purchases of short, medium, and long-term bonds have decreased. Major sellers have increased net sales of medium and long-term bonds, while the selling pressure on short and ultra-long bonds has weakened [26][30][33] - The report highlights that large commercial banks have continued to net buy short-term bonds within 3 years, while maintaining significant net selling pressure on ultra-long bonds of 10 years and above [34][36] Group 3 - In June, the data on wealth management did not show a significant seasonal decline, with a slight increase in wealth management scale during the week of June 22. The total wealth management scale decreased by 204.2 billion yuan, primarily due to a reduction in fixed-income products [34][36] - The fund scale increased by 299.9 billion yuan in June, with both equity and bond funds seeing significant increases. However, the issuance of new bond funds saw a slight decline compared to the previous week [36][37]

Group 1 - The core viewpoint of the news is that the launch of the first batch of Sci-Tech Bond ETFs by 10 public fund companies is expected to enhance liquidity in the Sci-Tech bond market and support technological innovation in China [1][2] - The 10 Sci-Tech Bond ETFs include 6 tracking the CSI AAA Sci-Tech Innovation Company Bond Index, 3 tracking the SSE AAA Sci-Tech Innovation Company Bond Index, and 1 tracking the SZSE AAA Sci-Tech Innovation Company Bond Index, reflecting a focus on high-quality bonds [2] - The total scale of Sci-Tech company bonds has surpassed 1.1 trillion yuan as of the end of May, with a significant portion issued by state-owned enterprises, indicating strong credit quality [3] Group 2 - The issuance of Sci-Tech Bond ETFs is seen as a way to diversify investment tools in the bond market and attract long-term capital, such as pension funds and insurance companies, to support Sci-Tech enterprises [2][3] - Recent policies have been supportive of the development of Sci-Tech bonds, with increased trading volumes indicating improved liquidity in the market [3] - The bond market has seen a significant inflow of funds into bond ETFs, with 7 out of the top 10 ETFs by trading volume being bond ETFs, highlighting their importance as a safe-haven asset in the current market environment [4]