If there is also a talent show in the bond ETF industry, presumably the government and financial bond ETF must be one of the recent C-position debut favorites.
Today, with a turnover of 10.200 billion yuan, the government and financial bond ETF successfully won the achievement of the only bond ETF with a turnover of more than 10 billion yuan in the whole market.
Source: Wind, as of April 15, 2024.
As a "10 billion" bond base, the government and financial bond ETF is really "eye-catching" and "gold-absorbing". Since its listing, the trading of government and financial bond ETFs has been relatively active, and there is a rising trend. If the monthly statistical interval is taken as the statistical range, the average daily turnover of government and financial bonds in a single month rose from 3.034 billion yuan in January to 8.610 billion yuan in April. If we take every 10 trading days as the statistical range, this trend also holds. In terms of average daily turnover, government and financial bond ETFs can be said to be "highly concerned".
Source: Wind, as of April 15, 2024.
Moreover, from the perspective of scale changes, the government and financial bond ETF did not stay at the level of "eye-catching", but was accompanied by the "long stream" of funds by virtue of its excellent market performance. Since its listing on October 25, 2022, the closing price of the government and financial bond ETF has risen from 100.320 yuan to 107.892 yuan, an increase of more than 7.5%.
Note: The Government Finance Bond ETF was established on August 19, 2022, with a closing price from Wind, as of April 15, 2024. There may be a difference between the trading price in the secondary market and the net value of the fund's shares, and the historical increase or decrease of the trading price does not indicate the future return of the fund. The market is risky, and investors need to be cautious.
Because of its excellent historical performance, after the scale exceeded 10 billion yuan in early March, the government and financial bond ETF has entered the queue with a scale of 14 billion yuan. In a little more than a month, the scale of government and financial bond ETFs has risen by 4 billion. If you look further, since 2024, it seems that the government and financial bond ETF has maintained such an astonishing scale expansion rate.
Executive summary: At the end of 2023, the scale of government and financial bond ETFs will still be 7.225 billion yuan, and from 7.2 billion to 14.4 billion, the scale of government and financial bond ETFs has almost doubled in less than four months. The continuous inflow of real money fully explains the "gold absorption" strength of the government and financial bond ETF.
Note: The fund size data on December 31, 2023 is from the fund quarterly report, and the scale data on April 12, 2024 is calculated based on the product share data disclosed by the Shanghai Stock Exchange and the fund net value data reviewed by the custodian bank, and the calculation formula is: ETF size = ETF share × ETF net value, please refer to the information disclosed on the official website of the Shanghai Stock Exchange on April 12, 2024 for specific share data, fund shares, fund net value and fund size are node data and may change. The market is risky, and investors need to be cautious.
High-quality bond market trading tools
In addition to the excellent performance of the market, what are the reasons why the government and financial bond ETFs can be favored by funds?
First of all, longevity. The Government and Financial Bond ETF closely tracks the China Bond - 7-10 Year Policy Financial Bond Index, and is the only long-term government and financial bond ETF in the whole market (as of December 31, 2023, it is the only major investment securities in the same category with a maturity of more than 5 years), which is very sensitive to changes in interest rates and can also bring greater income elasticity in the process of falling interest rates.
Secondly, pledgeable repurchase financing. The pledge rate of government and financial bond ETFs is around 95% (Note: Please refer to the latest public information of SSE and ChinaClear for details of the conversion rate of standard bonds). By pledging in exchange for funds, investors can reinvest in government and financial bond ETFs, and can also buy other assets, which is equivalent to realizing the operation of on-site leverage, and is also one of the ways to increase investment returns.
Finally, the ease of trading. Government and financial bond ETF can achieve T+0 trading - buy government and financial bond ETF on T day, you can sell it on T day, which is very convenient, greatly improves the utilization rate of funds, and is a great tool for liquidity management, and the tool attributes are very prominent.
Looking ahead, the foundation for a good rebound still needs to be consolidated, and the logic supporting the bond market has not yet been reversed. Inflation and financial data released last week showed that domestic inflation is still low, credit performance is still weak, or the common point is that domestic demand still needs to be further repaired. Monetary policy is expected to maintain a steady and loose tone, and the liquidity environment is expected to remain stable. In the medium term, with the continuation of the asset shortage pattern, the long logic of the bond market still holds. For investors who are optimistic about the medium- and long-term performance of the bond market, you may wish to pay attention to the government and financial bond ETFs.
Risk Warning: The fund manager undertakes to manage and use the fund assets in good faith, diligence and responsibility, but does not guarantee that the fund will be profitable, nor does it guarantee the minimum return. The fund manager reminds you of the principle of "buyer's responsibility" in fund investment, and you shall bear the investment risks caused by changes in the operation status of the fund and the net value of the fund after making an investment decision. Fund managers, fund custodians, fund distribution agencies and related institutions do not make any promises or guarantees for the investment returns of the fund. If the policy banks are restructured in the future, the nature of the policy financial bonds may change greatly, the credit rating of the bonds may also be adjusted accordingly, and the fund investment may face certain credit risks. The market is risky, and investors need to be cautious. This product is issued and managed by Wells Fargo Fund, and the agency does not assume the responsibility for the investment, redemption and risk management of the product. Investors investing in index funds should pay attention to the investment risks of index funds, including but not limited to the deviation between the return of the underlying index and the average return of the securities market, the fluctuation of the underlying index, and the deviation between the return of the fund's portfolio and the return of the underlying index.
Investment is risky, and fund investment should be cautious.
Before investing, investors are advised to carefully read the Fund Contract, Prospectus and other legal documents. The fund manager promises to manage and use the fund assets in an honest and trustworthy manner, and does not guarantee a certain profit, nor does it guarantee a minimum return. The performance of other funds does not constitute a guarantee of the performance of the Fund.
The above information is for reference only, if you need to purchase relevant fund products, please pay attention to the relevant regulations on investor suitability management, do a good risk assessment in advance, and purchase fund products with matching risk levels according to your own risk tolerance.