Report Industry Investment Rating No relevant content provided. Core View - Short-term negative factors are repaired, but medium-term structural optimization is not yet complete. The new regulations on fund fees have a positive impact on the bond market in the short term, and the sentiment in the bond market is expected to recover. Medium and long-term credit bonds and Tier 2 capital bonds are expected to benefit, while the benefits for short-term bond funds are limited, and bond ETFs may expand in scale but shorten in duration. [1][3][9] Summary by Directory 1. Redemption Fee Regulations Change: Partial Exemption for Bond and Index Funds, Transition Period Extended to 12 Months - On December 31, 2025, the China Securities Regulatory Commission revised and issued the "Regulations on the Administration of Sales Fees of Publicly Offered Securities Investment Funds," which came into effect on January 1, 2026. Compared with the draft for comments, the official version gives partial exemption for the redemption fees of bond funds and index funds. For individual investors who hold index funds and bond funds for 7 days or more, and institutional investors who hold bond funds for 30 days or more, fund managers can negotiate the redemption fee standards separately. The transition period for adjusting non-compliant existing funds is set to 12 months, which is more lenient and eases potential market disruptions. [7] 2. Impact of the New Redemption Regulations on the Bond Market: Short-term Negative Factors Repaired, Medium-term Structural Optimization Incomplete 2.1 Short-term Benefits: Uncertainty of the Impact of the New Regulations on the Bond Market Resolved, Market Sentiment Expected to Recover - The new regulations were implemented in a more moderate way, significantly reducing the short-term passive redemption pressure on bond funds and providing support for the bond market at the liability end. If the central bank accelerates treasury bond trading and insurance funds enter the market for allocation in the future, ultra-long bonds will be supported to some extent, and certificate of deposit rates are expected to decline slowly. [9] 2.2 Medium and Long-term Credit Bonds/Tier 2 Capital Bonds Benefit: More Obvious Repair of Liability End Stability - The enhanced stability of the liability end of bond funds is beneficial to medium and high-grade medium and long-term, highly liquid credit bonds and Tier 2 capital bonds. After the new regulations, the benefits to the liability end are more obvious compared to interest rate bonds and short-term credit bonds, and the spreads caused by previous fluctuations are expected to recover. [10] 2.3 Limited Benefits for Short-term Bond Funds, Bond ETFs May Expand in Scale but Shorten in Duration - The exemption threshold for institutional investors of short-term bond funds has been raised from 7 days to 30 days, weakening their liquidity advantage. Funds may flow to money market funds or bond ETFs. However, the current characteristics of the ETF market, such as "expanding scale, shortening duration, and concentrating on the short end," may continue, and long-duration credit bond/Science and Technology Innovation Bond ETFs may face more instability. [11] 3. Weekly Data Overview of Bond Funds - The ETF market shows the characteristics of "shortening duration and concentrating on the short end." The PCF duration of various ETFs generally shortens slowly. At the same time, the scale of medium and short-term varieties has expanded, and funds have gradually flowed into short-term treasury bond and credit bond varieties. The overall trading volume in the market has decreased in the past week, and trading activity has converged. [12]

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].

Report Title - The Allocation Value of Hybrid First - Tier Bond Funds Increases: Development History, Strategy Classification, and High - Performing Products [2] Report Industry Investment Rating - Not provided in the content Core Viewpoints - The development of hybrid first - tier bond funds has gone through four stages: concept birth, new - share subscription strategy, convertible bond strategy, and "pure bond +" strategy. Currently, the allocation value of such funds has increased [4]. - In terms of overall risk - return characteristics, first - tier bond funds are between second - tier bond funds and pure bond funds, but there are significant internal differences [4]. - First - tier bond funds can be classified into pure bond and quasi - pure bond strategies, convertible bond增厚 strategies, and stock增厚 strategies according to asset allocation [4]. - Some high - performing first - tier bond funds, such as Western Securities LiDe HuiXiang, Tianhong Tianli, and E Fund Enhanced Return, showcase diverse risk - return characteristics through different allocations of risky assets [4]. Summary by Relevant Catalogs 1. Development History of Hybrid First - Tier Bond Funds - **Concept Birth (2002 - 2005)**: The earliest product conforming to the concept of first - tier bond funds was Huaxia Bond, established in 2002 [12]. - **New - share Subscription Strategy (2005 - 2012)**: First - tier bond funds could participate in offline new - share subscriptions without a stock bottom position, and new - share subscription became the mainstream strategy [12]. - **Convertible Bond Strategy (2012 - 2021)**: Policy changes led to first - tier bond funds losing the qualification for new - share subscriptions, and convertible bond investment gradually became the mainstream for enhancing returns [12]. - **"Pure Bond +" Strategy (2021 - present)**: Regulatory restrictions on convertible bond investment have emerged. As of the latest data, there are 415 first - tier bond funds in the market, with a total scale of approximately 868 billion yuan [4][16]. 2. Risk - Return Characteristics of Hybrid First - Tier Bond Funds - **Overall Characteristics**: First - tier bond funds generally have risk - return indicators between second - tier bond funds and pure bond funds, and their net - value trends are most similar to those of medium - and long - term pure bond funds [31]. - **Internal Differences**: There are significant internal differences among first - tier bond funds. Some are similar to short - term and medium - and long - term pure bond funds, while others have significantly higher risk - return characteristics. The volatility range is wide, with annualized volatility ranging from less than 1% to over 10% [36]. - **Low - Volatility Products**: There are 10 large - scale low - volatility first - tier bond funds, with an average annualized volatility of 0.78% in the past three years. Most of them adopt pure bond strategies [38][40]. - **Medium - Volatility Products**: Medium - volatility first - tier bond funds are defined as those with an average annualized volatility between the 30% - 70% quantile. The average annualized volatility of representative products in the past three years is 1.66%. Most of them moderately invest in convertible bonds to enhance returns [42][44]. - **High - Volatility Products**: High - volatility first - tier bond funds are those with an average annualized volatility in the highest 30% quantile. The average annualized volatility of representative products in the past three years is 4.29%. Most of them have a convertible bond position of over 20%, and some use stock investment as the main means to enhance returns [46][48]. 3. Strategy Classification of Hybrid First - Tier Bond Funds - **Pure Bond and Quasi - Pure Bond Strategies**: There are 166 products that do not invest in any risky assets, with a total scale of 31.023 billion yuan. Some products with a convertible bond investment ratio of less than 3% are also similar to pure bond funds. Credit - bond - based strategies are more common, and there are products of various duration types [56]. - **Almost Full - Position Convertible Bond Strategies**: There are 6 products with an average convertible bond position of over 80%, with a total scale of 4.797 billion yuan. They are similar to convertible bond funds but rarely hold stocks, and they focus on the elasticity of convertible bonds [62]. - **Moderate Convertible Bond增厚 Strategies**: Excluding full - position convertible bond first - tier bond funds, other convertible bond strategies are relatively low - risk. According to the convertible bond position, they can be further divided into four categories: high, medium, low, and extremely high positions. Medium - and low - position products are large in number and scale [64][66]. - **Stock增厚 Strategies**: Only 29 products invest in stocks, with a total scale of 10.986 billion yuan. Most products have a stock position of less than 5%. Only Huafu Enhanced Return and E Fund Enhanced Return have a stock position of over 10% [77]. 4. High - Performing Funds and Representative Product Analysis - **Evaluation Method**: Six indicators are used to evaluate the comprehensive investment ability of first - tier bond funds, including absolute return acquisition ability, risk control ability, etc., and some negative screening conditions are set [82][83]. - **Representative Products**: Western Securities LiDe HuiXiang adopts a pure bond + convertible bond strategy, achieving stable returns. The fund has achieved positive returns every year since its establishment and has a high annual winning rate compared to the medium - and long - term pure bond fund index. Its convertible bond position has been relatively stable since 2023, with an average proportion of 14.96%, and it prefers to allocate medium - and small - cap convertible bonds [86][95].