Core Viewpoint - The recent shift in investment from bond funds to equity funds is driven by the "see-saw" effect, leading to significant redemptions in bond funds and a temporary improvement in market sentiment, suggesting potential trading opportunities in the bond market [1][2][3] Group 1: Market Trends - Equity funds have seen an average return of over 26% this year, while bond funds have only achieved an average return of 1.73%, indicating a strong preference for equities over bonds [2] - Recent data shows that several bond funds experienced net outflows exceeding 10 billion yuan, with notable funds like Hai Fu Tong and Da Cheng facing significant redemptions [2] - In contrast, multiple equity funds attracted over 50 billion yuan in inflows, highlighting a robust demand for equity investments [2] Group 2: Bond Market Analysis - The bond market is experiencing a phase of emotional recovery, with a recommendation for investors to adjust their positions cautiously and avoid chasing high prices [1][3] - The recent monetary policy environment is characterized by a net liquidity injection from the central bank, which may support the bond market [3] - Analysts suggest that external factors, such as potential monetary easing or overseas shocks, could influence the bond market's performance moving forward [3] Group 3: Investment Strategies - Investment strategies in the bond market should focus on taking profits during the current recovery phase, with a cautious approach recommended for high-risk assets [3] - The upcoming implementation of new redemption fee regulations for bond funds is expected to impact market dynamics, particularly in the credit bond sector [3] - Short-term strategies may involve leveraging and adjusting positions in high-certainty short-term bonds, while maintaining a cautious stance on credit bonds [3]

Core Viewpoint - The bond ETF market in China is experiencing significant growth, with the Ping An Fund's corporate bond ETF surpassing 10 billion yuan in scale, indicating a strong demand for high-grade credit bonds in a stable monetary policy environment [1][2]. Group 1: Market Performance - As of May 15, the total scale of bond ETFs in the market reached 99.241 billion yuan, an increase of 19.089 billion yuan since the end of 2023, representing a growth rate of 23.82% [1][2]. - Among the 20 bond ETFs, only one is currently in a loss position, while the remaining 19 have achieved floating profits, with some products yielding over 5% returns [2]. Group 2: Product Characteristics - The corporate bond ETF is the first Smart Beta bond ETF in China, focusing on high-grade credit bonds, particularly those rated AAA and above, and aims to serve as a core tool for "debt blue-chip" investments [1]. - The bond ETF market includes 15 interest rate bond ETFs, 3 credit bond ETFs, and 2 convertible bond ETFs, reflecting a diverse product offering [2]. Group 3: Investor Demand and Trends - The growth in bond ETFs is driven by increasing demand from institutional investors such as insurance companies and pension funds, who are seeking long-duration bond products [3]. - The bond ETF's transparent operation and low fees make it an attractive option for investors looking to switch between asset classes seamlessly [3]. Group 4: Future Outlook - The bond ETF market is expected to continue its rapid growth, with projections indicating that the total market scale could exceed 100 billion yuan in 2024 [2]. - Despite being the second-largest bond market globally, China's bond ETF market is still in its early stages, suggesting significant potential for future development [4].

1. Report Industry Investment Rating There is no information provided regarding the industry investment rating in the report. 2. Core Viewpoints - Convertible bond ETFs are a type of hybrid ETF product that combines the stability of fixed - income products with the growth potential of equity assets. They are highly flexible and efficient in terms of capital utilization, attracting continuous inflows of large - scale institutional funds [2]. - The convertible bond ETF market has witnessed rapid growth in scale and high trading enthusiasm, with both soaring returns and significant drawdowns. It has a high allocation value as it can balance risks and returns in investment portfolios [3][4]. - Given the current supply - demand imbalance, institutional recognition, and policy support, convertible bond ETFs have the potential for further expansion and product iteration [6]. 3. Summary by Directory 3.1 Convertible Bond ETFs: Hybrid Asset Tools with Bond - like Defense and Stock - like Growth - **1.1 T + 0 and Dual - Market Mechanisms: High Flexibility and Liquidity** - Convertible bond ETFs adopt a trading - open structure, allowing investors to trade on the secondary market like stocks and conduct large - scale subscriptions and redemptions on the primary market. They have no fixed term, enabling long - term holding. The T + 0 trading mechanism enhances capital efficiency, and the "physical + cash" redemption mechanism reduces costs and provides arbitrage opportunities. Market makers ensure on - exchange liquidity [14][16]. - **1.2 Different Portfolio Construction Styles of Two Convertible Bond ETFs** - Bosera focuses on balanced and diversified portfolios, with the top ten heavy - position bonds having relatively balanced proportions. Haitong concentrates on top - tier bonds, with the top two heavy - position bonds accounting for over 27%. Bosera has better risk - resistance in volatile markets, while Haitong may achieve higher returns in unilateral up - trends [18]. - **1.3 Regulatory Red Lines and Transparent Disclosure** - Regulators have set multiple red lines in investment ratios, concentration limits, leverage control, and information disclosure to prevent risks and enhance transparency. For example, at least 80% of the fund's assets must be invested in component bonds and alternative bonds of the target index. Fund managers are required to disclose net asset values, portfolios, subscription and redemption lists, and temporary events frequently [22]. 3.2 The Convertible Bond ETF Market is Booming, with Scale Reaching a Record High - **2.1 Rapid Growth in Market Scale** - As of July 25, 2025, the convertible bond ETF market scale reached 5.1171 billion yuan, accounting for 7.7% of the convertible bond market. It grew 5.72 times in 2024 and increased by 29.54% from June 20 to July 25, 2025 [3]. - **2.2 Active Trading** - In the past month, the turnover rate of the two convertible bond ETFs exceeded 14%. Bosera's convertible bond ETF had a turnover rate of 22.89% on July 4, and Haitong's reached 20.80% on June 24. The trading volume reached a peak of 9.448 billion yuan on July 4 and has remained at a high level since September 2024. The market participants are becoming more diversified [30][32]. - **2.3 Soaring Returns and Fluctuating Drawdowns** - From 2024 - 2025, convertible bond ETFs showed significant returns, with cumulative returns of products like Bosera's exceeding 30%. However, in 2025, the drawdowns increased, with Bosera's maximum drawdown at about - 10% and Haitong's at about - 8%. Bosera had a relatively strong recovery ability after the drawdown, taking 79 days to recover [35]. 3.3 Low Fees, High Liquidity, Transparent Portfolio, and Balanced Offense - Defense: Advantages of Convertible Bond ETFs - **3.1 Characteristics of Convertible Bond ETFs** - Convertible bond ETFs are flexible in trading, closely track the index, have transparent positions, and low fees. They can be traded on the exchange, and the T + 0 system improves capital efficiency. The ETF managers disclose the full position list and weight information daily, and the annual management fee is about 0.2% [44][46]. - **3.2 Allocation Value of Convertible Bond ETFs** - Convertible bond ETFs can balance risks and returns in investment portfolios, enhancing returns and adapting to changing market environments. They can provide equity - like returns in rising stock markets and bond - like protection in falling markets [5]. 3.4 Possibility of New Convertible Bond ETF Issuance - **4.1 Increasing Demand for Allocation** - Leading products like Bosera's have received large - scale net inflows during market fluctuations, indicating strong institutional demand for bond - stock hybrid tools. The main holders are bank wealth management, insurance funds, and pensions [6]. - **4.2 Significant Incremental Space in the Public Fund Industry** - Only 18 out of 52 fund companies that have launched ETF businesses have issued bond ETFs, leaving a large number of leading companies on the sidelines. There is great potential for new product launches [55]. - **4.3 Regulatory Policies Promote Product Innovation** - Regulatory documents such as the "Action Plan for Promoting the High - Quality Development of Index - based Investment in the Capital Market" encourage the innovation of bond ETF supply and coordinate with policies for long - term capital entry into the market [6].

Core Viewpoint - The rapid development of bond ETFs in China, driven by increasing investor demand for stable and transparent investment tools, has positioned Hai Fu Tong Fund as a leading player in this market, contributing significantly to the growth and innovation of bond ETFs [1][2]. Group 1: Market Growth and Development - The first bond ETF, the National Debt ETF, was established in 2013 with an issuance scale of 5.4 billion yuan, and by May 2024, the market size of bond ETFs surpassed 100 billion yuan, reaching over 400 billion yuan by July 2025 [1]. - As of July 17, 2025, the total scale of Hai Fu Tong Fund's bond ETFs exceeded 100 billion yuan, making it one of the first fund companies to achieve this milestone [1]. Group 2: Product Innovation and Strategy - Hai Fu Tong Fund has launched various innovative products, including short-term financing bond ETFs, urban investment bond ETFs, local government bond ETFs, and convertible bond ETFs, enriching the bond ETF product lineup [1][8]. - The Hai Fu Tong Zhong Zheng Short-term Financing Bond ETF, established in August 2020, saw its scale grow from 50 million yuan to 53.195 billion yuan by July 17, 2025, positioning it among the top tier of domestic bond ETFs [3][7]. Group 3: Management and Performance - The Hai Fu Tong Zhong Zheng Short-term Financing Bond ETF achieved a cumulative increase of 11.99% since its inception, with an annualized return between 2% and 3%, and a maximum drawdown of no more than 0.04% over the past two years [5][6]. - In 2024, the trading volume of the Hai Fu Tong Zhong Zheng Short-term Financing Bond ETF reached 2.64 trillion yuan, with an average daily trading volume exceeding 10.9 billion yuan [6]. Group 4: Risk Management and Ecosystem Development - Hai Fu Tong Fund emphasizes independent credit risk management, ensuring that the credit rating team operates separately from the fixed income investment team, which enhances the effectiveness of credit risk management [8][9]. - The company actively engages in building a bond ETF ecosystem by collaborating with various institutions and promoting investor education to expand the investor base and enhance product awareness [9].

Group 1 - The core viewpoint of the articles highlights the significant rise in the convertible bond market, with the China Convertible Bond Index reaching a ten-year high, driven by strong performance in the A-share market and a favorable investment environment for convertible bonds [1][2][3]. - The China Convertible Bond Index has seen a year-to-date increase of 7.18%, with a notable rise of over 22% since September 24, 2024, indicating strong market momentum [2]. - The convertible bond market is characterized by low volatility and low drawdown, attracting continuous inflow of new capital, which is expected to further enhance investment experiences [2][3]. Group 2 - Several funds tracking convertible bonds have reported positive returns this year, with the top-performing fund, China Europe Convertible Bond A, achieving a return of 13.11% [4][5]. - A total of 14 convertible bond funds have recorded returns exceeding 10%, showcasing the strong performance of this asset class [4][5]. - The performance of convertible bond ETFs has also been commendable, with returns exceeding 7% for the Bosera China Convertible Bond ETF and over 5% for the Haifutong Shanghai Investment Grade Convertible Bond ETF [5]. Group 3 - The supply-demand imbalance in the convertible bond market is a key factor supporting the rising valuations, with supply expected to contract while demand continues to grow [2][3]. - Historical data indicates that most convertible bonds exit through conversion to equity rather than actual repayment, suggesting manageable credit risk in the current market environment [3]. - The market's confidence in convertible bonds has strengthened due to reduced risks of delisting or default, further enhancing investor sentiment [3].

Domestic Convertible Bond ETF Development Status - Two convertible bond ETFs have been issued in China: Bosera CSI Convertible Bond and Exchangeable Bond ETF (as of Q1 2025, size 37.66 billion RMB) and Haifutong SSE Investment Grade Convertible Bond ETF (as of Q1 2025, size 5.78 billion RMB), together accounting for 6.1% of the total market size of convertible bonds [1][6][12] - The management fee rates for these ETFs are lower than those of actively managed convertible bond funds (0.15% and 0.25% respectively) [1][12] - Since 2024, institutional investors have accounted for over 97% of the holdings, indicating a strong demand for ETF allocation to diversify non-systematic risks [1][12] - Performance-wise, the returns for 2024 are 5.87% for Bosera and 8.32% for Haifutong, outperforming the average of actively managed convertible bond funds [1][12][22] U.S. Convertible Bond Market - The U.S. convertible bond market is the largest and most mature globally, with a total outstanding size of 254 billion USD by the end of 2024, covering a wide range of issuers from small to large companies, primarily in TMT, consumer, and healthcare sectors [2][42] - The terms of U.S. convertible bonds are designed to be flexible, with a stable default rate compared to the Chinese market [2][66] U.S. Convertible Bond Index and Index Funds - The U.S. has a well-established convertible bond index system, with various indices compiled by Bloomberg, ICE BofA, and iBoxx, dating back to 1988 [3][70] - The first U.S. convertible bond ETF, SPDR Bloomberg Convertible Securities ETF (CWB), was launched in 2009, with current sizes of 4 billion USD for CWB and 2.6 billion USD for iShares' ICVT [3][77] - Over the past five years, the annualized returns for passive ETFs (10%-11%) have significantly outperformed the average of actively managed funds (7.3%) [3][88] Insights and Recommendations - Suggestions for the development of China's convertible bond market include improving the index system and developing segmented strategy indices [4][89] - Emphasizing low fees as a core competitive advantage for passive products [4][89] - Enhancing liquidity of ETFs and underlying assets to increase trading activity [4][90] - Innovating bond terms to introduce more flexible mechanisms while protecting investors [4][90]

Core Viewpoint - The total scale of bond ETFs in the market has reached 253.65 billion yuan as of May 12, 2025, marking a significant increase of nearly 80 billion yuan or 45.8% year-to-date, making it the second-largest product type in terms of scale growth in the ETF market after commodity ETFs [1]. Group 1: Market Growth - The bond ETF market has seen substantial growth this year, with new fund launches playing a crucial role. Eight newly established benchmark corporate bond ETFs raised a total of 21.71 billion yuan, bringing their management scale to 41.9 billion yuan [1]. - Existing bond ETFs have also attracted significant net inflows, with 21 existing bond ETFs collectively drawing in 30.97 billion yuan in net inflows in 2025, indicating strong market recognition and continued investment enthusiasm [1]. Group 2: Scale Changes Over Time - Key milestones in the scale of bond ETFs throughout the year include: - Early January 2025: 173.97 billion yuan - End of January 2025: 192.05 billion yuan (+10.39%) - End of February 2025: 204.11 billion yuan (+11.35%) - End of March 2025: 218.13 billion yuan (+13.90%) - End of April 2025: 247.64 billion yuan (+13.50%) - May 9, 2025: 253.13 billion yuan (+45.50%) - May 12, 2025: 253.65 billion yuan (+45.80%) [1].

Performance Insights - In Q1 2025, convertible bond funds achieved a median return of 3.48%, outperforming pure bond funds which had a median return of -0.19%[1] - The first quarter saw significant growth in the scale of convertible bond funds, reaching 98.4 billion CNY, an increase of 3.6% from the previous quarter[2] - The excess return of convertible bond funds was highlighted, with a 25th percentile excess return of 1.72%[8] Fund Size and Positioning - The scale of first and second-tier bond funds increased by 331 billion CNY and 871 billion CNY, reaching 7686 billion CNY and 7692 billion CNY respectively in Q1 2025[2] - Convertible bond fund positions increased by 0.32 percentage points to 91.24%, marking a historical high[2] - Traditional bond funds saw a reduction in convertible bond positions, with first-tier bond funds decreasing by 0.04 percentage points to 8.65%[22] Market Trends and Strategies - Public funds focused on increasing positions in sectors like AI and photovoltaic components while reducing exposure to banks and brokerages[34] - The overall market environment in April 2025 is characterized by uncertainties, prompting a cautious approach among fund managers[3] - The preference for lower-risk bond funds is driven by banks' risk appetite and capital usage considerations[23] Risk Factors - Potential risks include accelerated style rotation in equity markets and unexpected adjustments in convertible bond market rules[4]