Today, the first quarter report of Penghua Fund's fixed income products in 2024 was officially disclosed, let's take a look at what important information is disclosed in the quarterly report, what investment strategies are used in the product, and how do fund managers judge the future trend of bonds?
Investment review
The portfolio mainly adopts a coupon strategy, mainly medium and high-grade credit bonds, strictly controls credit risk, moderately increases the duration and leverage level from January to February, and reduces the duration and leverage in March, and strives to maintain a stable net value of the portfolio.
Investment strategy
Looking back at the trend of the bond market in the first quarter of 2024, the domestic economy has been running smoothly since the beginning of the year, and the monetary policy has maintained a balanced and loose tone, with the MLF continuing for two consecutive months at the end of last year and the RRR cut in January this year releasing about 1 trillion yuan of long-term liquidity, the capital side has reached an endogenous balance and the liquidity is relatively abundant. Against the backdrop of low yields, institutions are asking for income from duration, and long-term bonds and ultra-long-term bonds have performed well. On the whole, at the end of the first quarter, the 1-year, 3-year, and 10-year yields of CDB were 1.84%, 2.17%, and 2.41%, respectively, down 36BP, 17BP, and 27BP compared with the end of the previous year.
In terms of credit bonds, the scale of wealth management has grown steadily since the beginning of the year, the supply of high-interest assets such as urban investment has decreased, and the decline in loan interest rates may have squeezed out some credit bond financing needs. Specifically, at the end of the first quarter, the 1-year AAA short-term financing yield was 2.33%, down 20BP compared with the end of the previous year, and the 1-year AA short-term financing yield was 2.48%, down 25BP compared to the end of the previous year, and the rating spread was compressed, and the 3-year AAA medium-term note yield was 2.50% at the end of the first quarter, down 21BP compared with the end of the previous year, and the 3-year AA medium-term note yield was 2.74%, down 35BP compared with the end of the previous year, which performed better than the 1-year and the term spread was compressed.
Data source: Penghua Wenli Short-term Bond Fund 2024 first quarter report
Note: The Fund is co-managed with Fund Manager Wang Kangjia
Investment review
During the Reporting Period, the Fund mainly bought and held medium to high rated credit bonds, and the duration of the portfolio remained around the neutral level. In addition, during the reporting period, the Fund made some adjustments to convertible bonds, but they were still mainly undervalued and stable.
Investment strategy
In the first quarter of 2024, the mainland bond market rose as a whole, with the Shanghai Composite Treasury Bond Index rising 1.97% and the Interbank China Bond Composite Wealth Index rising 1.99% compared to the end of the previous year. In the first quarter, the demand for institutional bond allocation was strong, the central bank lowered the reserve requirement ratio to maintain a stable capital situation, the market sentiment was high, and the long-end and ultra-long-end interest rates of the bond yield curve fell sharply.
In terms of equity and convertible bond markets, the stock market first fell and then rose in the first quarter, with banks, coal, nonferrous metals and other dividends and resources performing well, real estate, medicine and other sectors performing poorly, and TMT industries such as computers fluctuating sharply, with the Shanghai Composite Index rising 2.23% in the first quarter and the ChiNext Index falling 3.87%.
Data source: Penghua Industrial Bond Fund 2024 first quarter report
Investment review
The equity market fell first and then rose during the quarter, with the CSI 300 Index up 3.1% and the ChiNext Index down 3.87%. During the reporting period, the fund mainly held medium and high-rated credit bonds, and maintained the duration of the portfolio at the beginning of the period at a neutral and slightly longer level, and reduced the duration to a neutral level in mid-March, while investing moderately in the equity market.
Investment strategy
Bond yields fell sharply in the first quarter of 2024. From January to February, bond yields continued to fall due to the PBOC's cut in the reserve requirement ratio and the decline in the equity market, and in March, bond yields fluctuated in a narrow range due to historically low bond yields and the lack of obvious signals in the market. Overall, bond yields of all maturities fell by varying magnitudes in the first quarter.
In the first quarter, all bond wealth indices rose to varying degrees, with the Chinese bond wealth index rising the most, up 2.41%.
Data source: Penghua Anze Mixed Fund 2024 first quarter report
Investment review
In the first quarter, the portfolio maintained a neutral and high duration and leverage, insisted on medium and high-grade high-quality credit bonds as the bottom position in terms of varieties, and took the opportunity to participate in the swing trading of medium and long-term interest rate bonds. In the second quarter, the portfolio will continue to dynamically optimize investment varieties, flexibly use leveraged arbitrage, swing trading and other methods to achieve income thickening, and strive to provide holders with medium and long-term stable returns
Investment strategy
In the first quarter of 2024, bond yields fluctuated to the downside. In January and February, the domestic economic fundamentals were under pressure, PMI was in the contraction range for 2 consecutive months, CPI was at a low level or even negative, and the issuance of first-class government bonds slowed down, the supply and demand structure of the bond market was good, and the income fell sharply. On the whole, in the first quarter of this year, interest rate bonds of various maturities fluctuated downward by 20-40BP, and the curve shape was first bullish flat and then steep.
Data source: Penghua Puli Bond Fund 2024 first quarter report
Investment review
In terms of portfolio operation, the portfolio maintained a high duration level and actively participated in the offensive market of long-term bonds and ultra-long-term bonds. In mid-to-late March, the portfolio slightly reduced its overall duration exposure, focusing on short- and medium-term credit allocation opportunities.
Investment strategy
The bond market has been strong in the first quarter of 2024, with yields falling significantly. In January 2024, the equity market has adjusted, the market risk appetite has declined, and the bond market has strengthened significantly under the seesaw effect of stocks and bonds, superimposed on the strong demand for various types of institutional allocation. In terms of monetary policy, the central bank cut the reserve requirement ratio by 50bp in January and the 5-year LPR interest rate cut by 25bp in February, fully releasing easing signals. Since the beginning of this year, the central bank has been relatively active in the open market, the market capital supply is abundant, and central bank officials have repeatedly stated that there is still room for further liberalization of monetary policy, guiding broad-spectrum interest rates to continue to decline. Entering March, the fundamental data improved month-on-month, the bond market volatility increased, and the bond market entered a volatile trend. In terms of credit, the package of bond policies continued to be vigorously promoted, and the yield on medium- and low-rated coupon assets continued to decline. For the whole quarter, the yield on 10-year Treasury bonds fell from 2.56% to 2.29%, the yield on 3-year AAA bonds fell from 2.71% to 2.50%, and the yield on 1-year AA bonds fell from 2.73% to 2.48%.
Data source: Penghua Zuncheng 3-month regular open bond fund 2024 first quarter report
Note: The Fund is co-managed with Fund Manager Li Zheng
Investment review
During the reporting period, the Fund mainly held convertible bonds and stocks, and the overall position of convertible bonds and stocks did not change much, and the convertible bonds were adjusted, increasing the holdings of convertible bonds and reducing the holdings of convertible bonds.
Investment strategy
In the first quarter of 2024, bond market yields will decline as a whole, and medium- and long-term bond yields will generally decline more than short-end. In the first quarter, the overall monetary environment was loose, the growth rate of real estate sales continued to decline, credit demand was weak, and the stock market fell before the Spring Festival to suppress risk appetite, all of which jointly stimulated the allocation demand for bonds. Looking ahead to the second quarter of 2024, the domestic credit demand has not seen a significant upward trend, the monetary environment is loose, and the overall upward momentum of the bond market yield may still be insufficient.
In the first quarter of 2024, the stock market fell first and then rose, and it was highly volatile. The stock market fell before the Spring Festival, and the market experienced extreme conditions under the influence of factors such as snowball knocking in and quantitative product repositioning, and the subsequent market gradually returned to rationality and repaired most of the decline. In terms of industries, upstream resources, banks, and home appliances performed well, while pharmaceutical, electronics, real estate and other industries performed poorly. Looking forward to the second quarter of 2024, the current overall valuation position of the stock market is still not high, the domestic economic fundamentals remain resilient, the external demand is improving, and the monetary environment is loose, the stock market may show a structural market, and the investment opportunities in the export chain, upstream resources and technology and pharmaceutical sectors are relatively optimistic.
In the first quarter of 2024, the convertible bond market followed the stock market and then rose, with the CSI Convertible Bond Index falling 0.81% in the first quarter. The valuation level of the convertible bond market has been compressed, and given that the bond market yields have not risen, the valuation compression of the convertible bond market reflects investors' cautious sentiment about the future of the equity market. Looking forward to the second quarter of 2024, the negative impact of the bond market on the valuation of convertible bonds may not be significant, and the stock market is still at a low level.
Data source: Penghua Convertible Bond Fund 2024 Q1 Report
Investment review
In the first quarter of 2024, the Fund strictly controls credit risk, selects individual bonds for allocation, obtains coupon income, and moderately participates in long-term interest rate bond trading opportunities, thickens portfolio returns, and adjusts portfolio duration and leverage more flexibly, striving for stable portfolio net performance.
Investment strategy
In the first quarter of 2024, economic data showed signs of some marginal improvement. From January to February, the manufacturing PMI continued to be in the contraction range, but it rebounded slightly compared with December last year, and the manufacturing PMI rose above the boom and bust line in March. On the demand side, the growth rate of fixed asset investment rose slightly, infrastructure investment remained high, and the year-on-year decline in real estate development investment narrowed slightly. Consumption recovered moderately, with the number of trips and tourism revenue during the Spring Festival holiday both exceeding the same period in 2019, and the performance of service industry consumption remained better than that of goods consumption. In terms of exports, the year-on-year growth rate of exports from January to February rebounded from December last year, which was also significantly higher than market expectations. In terms of financial data, the year-on-year increase in new credit from January to February, coupled with the slow issuance of local bonds, jointly affected the growth rate of social finance. In terms of inflation data, the trend of PPI was relatively stable, and the year-on-year CPI in February turned positive for the first time since September last year due to the dislocation of the Spring Festival, and the core CPI excluding food and energy increased widely. Overseas, the year-on-year growth rate of US CPI and core CPI slowed down, the Federal Reserve kept the benchmark interest rate unchanged in the first quarter, and the market expected its interest rate cut to be delayed, and the US Treasury interest rate fluctuated and rebounded. Affected by factors such as the Swiss National Bank's unexpected interest rate cut, the yen did not rise but depreciated after the Bank of Japan raised interest rates, and the dollar index strengthened, the fluctuation of the RMB exchange rate intensified in late March. Monetary policy operations take into account multiple objectives and maintain reasonable and abundant liquidity. Throughout the quarter, the repo rate as a whole moved slightly downward, and the phenomenon of liquidity stratification eased significantly. Among them, the average value of DR007 was 1.87%, down 6BP from the previous quarter, and the average value of R007 was 2.13%, down 27BP from the previous quarter. In the first quarter, under the continuous care of the central bank, the capital side remained balanced and loose, and the yields of bonds of all maturities fell, of which the yield of the 1-year CDB bond fell by about 36BP, the yield of the 10-year CDB bond fell by about 27BP, the yield of the 1-year AA+ short-term financing fell by about 20BP, and the yield of the 3-year AA+ medium note fell by about 21BP.
Data source: Penghua 3-month short-term bond fund 2024 first quarter report
Note: The Fund is jointly managed with fund managers Wang Kangjia and Wang Zhongxing
Investment review
In the first quarter, the portfolio maintained high duration and leverage, actively participated in long-end and ultra-long-end interest rate operations, and thickened the portfolio's income. In the second quarter, we paid attention to the rhythm of the supply of interest rate bonds. The equity market fluctuated greatly in the first quarter, and the market suffered a liquidity shock at the beginning of the year, and short-term pressure has been greatly released. The equity position is based on dividend assets and globally priced resource stocks, and chooses opportunities to participate in AI-related underlying investments.
Investment strategy
The U.S. PMI, employment and other data in the first quarter continued to be better than expected, inflation rebounded, and the optimistic expectations for interest rate cuts at the beginning of the year quickly reversed. Commodities such as copper, crude oil, and gold, which are limited in supply in the medium term, have risen significantly. The demand of the real economy and financial conditions will continue to see-saw repeatedly, and the Fed's willingness to cut interest rates under election years and fiscal pressures is also worth paying attention to, exacerbating the risk of secondary inflation. Domestically, in the first quarter of 2024, domestic and external demand will be greatly differentiated, the focus of domestic policies will still be on structure rather than aggregate, the policy and investment in the science and technology industry represented by "new productivity" will be significantly strengthened, and the problems of real estate and local government debt will still be mainly risk prevention. Fiscal policy still emphasizes "tight days", monetary policy emphasizes "precision and effectiveness", in the context of good economic data in the first quarter, it is expected that the aggregate monetary policy will be relatively restrained, and structural tools will continue to exert force.
Data source: Penghua Yuexiang One-year Holding Period Mixed Fund 2024 First Quarter Report
Note: The Fund is jointly managed with Fund Manager Yang Yajie
Investment review
In terms of bond investment, the portfolio will focus on high-grade and high-quality credit bond investment in the first quarter of 2024, moderately increase duration, participate in swing trading, and increase portfolio returns.
Investment strategy
In the first quarter of 2024, the domestic economy continued to recover resiliently, exports were stronger than expected, and consumption remained resilient. In terms of real estate, the transaction volume of second-hand houses in some first-tier cities has rebounded marginally. Specific to the bond market, considering that the domestic fundamentals are still on the way to recovery and the economic prospects of overseas developed countries are uncertain, domestic monetary and fiscal policies will continue to escort stable growth. In this context, the overall risk of the bond market is controllable and still has good allocation value.
Bond market yields fell broadly in the first quarter of 2024. Among them, the yield of 10-year treasury bonds fell by 26BP to 2.29%, and the yields of 3-year and 5-year credit bonds fell by 21BP and 35BP respectively.
Data source: Penghua Fengheng Bond Fund 2024 Q1 report
Investment review
In the first quarter, the portfolio maintained a neutral long duration and low leverage, and made timely adjustments according to market changes.
Investment strategy
In the first quarter of 2024, the macro economy as a whole remained stable, and the sub-data of each item were differentiated. Liquidity remained reasonable and abundant, the cost of repurchase decreased to a certain extent compared with the end of last year, and the volatility decreased significantly, and the market's expectations for the capital side were relatively stable. The pace of government bond issuance lagged behind, and fiscal spending accelerated in February and March, which also provided some support for liquidity. However, the actual overnight buyback cost did not drop significantly, and even rose to a certain extent in March. Loose and expensive funds have become the new normal.
Against this macro backdrop, the bull run in the bond market continued, with the 10-year Treasury yield breaking below a record low of 2.5% to around 2.3%. Interest rate spreads have narrowed significantly, and credit bond yields have also entered historically low ranges.
Data source: Penghua Jinli Bond Fund 2024 first quarter report
Investment review
In terms of portfolio operation, the portfolio maintained a high duration level from January to February, and actively participated in the offensive market of long-term bonds and ultra-long-term bonds. In mid-to-late March, the portfolio slightly reduced its overall duration exposure, focusing on short- and medium-term credit allocation opportunities.
Investment strategy
The bond market has been strong in the first quarter of 2024, with yields falling significantly. In January 2024, the equity market has adjusted, the market risk appetite has declined, and the bond market has strengthened significantly under the seesaw effect of stocks and bonds, superimposed on the strong demand for various types of institutional allocation. In terms of monetary policy, the central bank cut the reserve requirement ratio by 50bp in January and the 5-year LPR interest rate cut by 25bp in February, fully releasing easing signals. Since the beginning of this year, the central bank has been relatively active in the open market, the market capital supply is abundant, and central bank officials have repeatedly stated that there is still room for further liberalization of monetary policy, guiding broad-spectrum interest rates to continue to decline. Entering March, the fundamental data improved month-on-month, the bond market volatility increased, and the bond market entered a volatile trend. In terms of credit, the package of bond policies continued to be vigorously promoted, and the yield on medium- and low-rated coupon assets continued to decline. For the whole quarter, the yield on 10-year Treasury bonds fell from 2.56% to 2.29%, the yield on 3-year AAA bonds fell from 2.71% to 2.50%, and the yield on 1-year AA bonds fell from 2.73% to 2.48%.
Data source: Penghua Fengying Bond Fund 2024 Q1 report
Note: The Fund is jointly managed with Fund Manager Wang Zhifei
Investment review
In the first quarter of 2024, the Fund flexibly used generic strategies to actively participate in swing operations in a market environment with declining returns, providing income enhancement to the portfolio.
Investment strategy
In the first quarter of 2024, economic data showed signs of some marginal improvement. From January to February, the manufacturing PMI continued to be in the contraction range, but it rebounded slightly compared with December last year, and the manufacturing PMI rose above the boom and bust line in March. On the demand side, the growth rate of fixed asset investment rose slightly, infrastructure investment remained high, and the year-on-year decline in real estate development investment narrowed slightly. Consumption recovered moderately, with the number of trips and tourism revenue during the Spring Festival holiday both exceeding the same period in 2019, and the performance of service industry consumption remained better than that of goods consumption. In terms of exports, the year-on-year growth rate of exports from January to February rebounded from December last year, which was also significantly higher than market expectations. In terms of financial data, the year-on-year increase in new credit from January to February, coupled with the slow issuance of local bonds, jointly affected the growth rate of social finance. In terms of inflation data, the trend of PPI was relatively stable, and the year-on-year CPI in February turned positive for the first time since September last year due to the dislocation of the Spring Festival, and the core CPI excluding food and energy increased widely. Overseas, the year-on-year growth rate of US CPI and core CPI slowed down, the Federal Reserve kept the benchmark interest rate unchanged in the first quarter, and the market expected its interest rate cut to be delayed, and the US Treasury interest rate fluctuated and rebounded. Affected by factors such as the Swiss National Bank's unexpected interest rate cut, the yen did not rise but depreciated after the Bank of Japan raised interest rates, and the dollar index strengthened, the fluctuation of the RMB exchange rate intensified in late March. Monetary policy operations take into account multiple objectives and maintain reasonable and abundant liquidity. Throughout the quarter, the repo rate as a whole moved slightly downward, and the phenomenon of liquidity stratification eased significantly. Among them, the average value of DR007 was 1.87%, down 6BP from the previous quarter, and the average value of R007 was 2.13%, down 27BP from the previous quarter. In the first quarter, under the continuous care of the central bank, the capital side remained balanced and loose, and the yield of money market instruments fell significantly compared with the end of the previous quarter, of which the yield on the 1-year AAA certificate of deposit fell by about 17BP, the yield on the 1-year CDB bond fell by about 36BP, and the yield on the 1-year AAA short-term financing fell by about 20BP.
Data source: Penghua Wenhua 90-day rolling bond fund 2024 first quarter report
Note: The Fund is co-managed with Fund Manager Ye Chaoming
Investment review
The Fund maintains portfolio liquidity and strives to increase investment returns through sampling replication and dynamic optimization strategies while controlling tracking errors.
Investment strategy
In the first quarter of 2024, economic data showed signs of some marginal improvement. From January to February, the manufacturing PMI continued to be in the contraction range, but it rebounded slightly compared with December last year, and the manufacturing PMI rose above the boom and bust line in March. On the demand side, the growth rate of fixed asset investment rose slightly, infrastructure investment remained high, and the year-on-year decline in real estate development investment narrowed slightly. Consumption recovered moderately, with the number of trips and tourism revenue during the Spring Festival holiday both exceeding the same period in 2019, and the performance of service industry consumption remained better than that of goods consumption. In terms of exports, the year-on-year growth rate of exports from January to February rebounded from December last year, which was also significantly higher than market expectations. In terms of financial data, the growth rate of social finance declined due to the slight year-on-year increase in new credit from January to February, coupled with the slowdown in the issuance of local bonds. In terms of inflation data, the trend of PPI was relatively stable, and the year-on-year CPI in February turned positive for the first time since September last year due to the dislocation of the Spring Festival, and the core CPI excluding food and energy increased widely. Overseas, the year-on-year growth rate of U.S. CPI and core CPI slowed down, the Federal Reserve kept the benchmark interest rate unchanged in the first quarter, the market expects its interest rate cut to be delayed, the U.S. bond interest rate fluctuated and rebounded, the U.S. dollar index strengthened, and the fluctuation range of the RMB exchange rate increased in late March. Monetary policy operations take into account multiple objectives and maintain reasonable and abundant liquidity. Throughout the quarter, the repo rate as a whole moved slightly downward, and the phenomenon of liquidity stratification eased significantly. Among them, the average value of DR007 was 1.87%, down 6BP from the previous quarter, and the average value of R007 was 2.13%, down 27BP from the previous quarter. In the first quarter, under the continuous care of the central bank, the capital side remained balanced and loose, and the yield of money market instruments fell significantly compared with the end of the previous quarter, of which the yield on the 1-year AAA certificate of deposit fell by about 17BP, the yield on the 1-year CDB bond fell by about 36BP, and the yield on the 1-year AAA short-term financing fell by about 20BP.
In terms of certificates of deposit, the yield in the first quarter was mainly below. From January to February, the yield on certificates of deposit fell rapidly, and the central bank continued to invest medium and long-term funds since November last year, the volatility of funds became smaller, and the interest rate difference between the yield on certificates of deposit and the funding rate continued to narrow. Before the Spring Festival, the demand for bank allocation was strong, and after the Spring Festival, the funding rate began to fall, non-bank institutions began to increase the allocation of certificates of deposit, and the 1-year AAA yield continued to decline to around 2.23%. Since March, there has been no further downward movement in the capital center, and the interest rate differential between the yield on certificates of deposit and the funding rate has been compressed to a low level, and certificates of deposit have fluctuated in a narrow range around 2.25%.
Data source: Penghua Interbank Certificate of Deposit Index Fund 2024 first quarter report
Note: The Fund is co-managed with Fund Manager Ye Chaoming
Investment review
The portfolio mainly adopts a coupon strategy, mainly medium and high-grade credit bonds, strictly controls credit risk, moderately increases the duration and leverage level from January to February, and reduces the duration and leverage in March, and strives to maintain a stable net value of the portfolio.
Investment strategy
Looking back at the trend of the bond market in the first quarter of 2024, the domestic economy has been running smoothly since the beginning of the year, and the monetary policy has maintained a balanced and loose tone, with the MLF continuing for two consecutive months at the end of last year and the RRR cut in January this year releasing about 1 trillion yuan of long-term liquidity, the capital side has reached an endogenous balance and the liquidity is relatively abundant. Against the backdrop of low yields, institutions are asking for income from duration, and long-term bonds and ultra-long-term bonds have performed well. On the whole, at the end of the first quarter, the 1-year, 3-year, and 10-year yields of CDB were 1.84%, 2.17%, and 2.41%, respectively, down 36BP, 17BP, and 27BP compared with the end of the previous year.
In terms of credit bonds, the scale of wealth management has grown steadily since the beginning of the year, the supply of high-interest assets such as urban investment has decreased, and the decline in loan interest rates may have squeezed out some credit bond financing needs. Specifically, at the end of the first quarter, the 1-year AAA short-term financing yield was 2.33%, down 20BP compared with the end of the previous year, and the 1-year AA short-term financing yield was 2.48%, down 25BP compared to the end of the previous year, and the rating spread was compressed, and the 3-year AAA medium-term note yield was 2.50% at the end of the first quarter, down 21BP compared with the end of the previous year, and the 3-year AA medium-term note yield was 2.74%, down 35BP compared with the end of the previous year, which performed better than the 1-year and the term spread was compressed.
Data source: Penghua Wenrui Short and Medium Term Bond Fund 2024 first quarter report
Note: The Fund is co-managed with Fund Manager Ye Chaoming
Investment review
During the Reporting Period, the Fund mainly bought and held medium to high rated credit bonds, and the duration of the portfolio remained around the neutral level. In addition, during the reporting period, the Fund made some adjustments to convertible bonds, but they were still mainly undervalued and stable.
Investment strategy
In the first quarter of 2024, the mainland bond market rose as a whole, with the Shanghai Composite Treasury Bond Index rising 1.97% and the Interbank China Bond Composite Wealth Index rising 1.99% compared to the end of the previous year. In the first quarter, the demand for institutional bond allocation was strong, the central bank lowered the reserve requirement ratio to maintain a stable capital situation, the market sentiment was high, and the long-end and ultra-long-end interest rates of the bond yield curve fell sharply.
In terms of equity and convertible bond markets, the stock market first fell and then rose in the first quarter, with banks, coal, nonferrous metals and other dividends and resources performing well, real estate, medicine and other sectors performing poorly, and TMT industries such as computers fluctuating sharply, with the Shanghai Composite Index rising 2.23% in the first quarter and the ChiNext Index falling 3.87%.
Data source: Penghua Yongtai Regular Open Bond Fund 2024 First Quarter Report
Note: The Fund is jointly managed with the fund manager, Zhu Song
Investment strategy
During the reporting period, the price of funds was stable, but the volatility decreased significantly, the real estate sales were weak, the overall low economic fundamentals stabilized, the bond market fell sharply with the support of the allocation plate, and the decline in risk appetite accelerated the decline in bond yields.
On the other hand, the supply of local bonds and government and financial bonds is less than expected, and at the same time, the supply of credit bonds is also relatively weak in the context of debt transformation, the contradiction between supply and demand in the bond market is prominent, and the bond market is strong in the context of asset shortage.
During the reporting period, the Fund's comprehensive fundamentals, capital and policy aspects, along with the continuous decline in yield, the duration and leverage level of the Fund have been reduced to a certain extent.
Data source: Penghua Fengda Bond Fund 2024 first quarter report
Investment review
During the reporting period, the Fund mainly held interest rate bonds, generally maintained a low duration and leverage level, and flexibly adjusted according to market changes.
Investment strategy
Since the first quarter, driven by factors such as exports and consumption, domestic economic data have improved marginally. In terms of inflation, PPI continued to remain low year-on-year, CPI rose slightly year-on-year, and "deflationary" pressure eased slightly. In terms of monetary policy, the policy tone is generally positive, with a 50bp RRR cut in January and a 25bp cut in the 5-year LPR in February, with a loose balance of funds.
In terms of the bond market, in January, the equity market fluctuated and fell, the market risk appetite fell, the superimposed capital remained loose, the "boots" of the RRR reduction policy landed, and the yield fell rapidly; in February, the issuance of government bonds continued to be weaker than expected, and the 5-year LPR was sharply reduced by 25BP, and the insurance asset management deposits were included in the interbank deposits, and other factors, the logic of "asset shortage" was further deduced, and the yield further declined; in March, the "two sessions" The policy is basically in line with expectations, while the supply information of ultra-long bonds continues to disturb the market, superimposed on the economic data from January to February, and the disturbance of cross-quarter factors, the yield is generally volatile. Overall, in the first quarter, the yield curve as a whole shifted significantly downward.
Data source: Penghua Pure Bond Fund 2024 Q1 Report
Investment review
During the reporting period, the portfolio maintained a neutral to long-term during the market volatility and downturn, and the holdings were mainly short- and medium-term, medium- and high-grade credit bonds, and maintained a certain degree of leverage, and the overall performance was stable.
Investment strategy
During the reporting period, the domestic vitality of the economy is still weak, external demand remains resilient, manufacturing investment in the rebound in exports and high-tech manufacturing and equipment investment driven by better performance; the pattern of insufficient physical financing demand in the first quarter continues, and the central bank has a protective attitude in terms of monetary policy, on January 24, the central bank announced a comprehensive RRR cut of 50BP+ targeted interest rate cut of 25BP, and on February 20, the 5-year LPR quotation was sharply reduced by 25BP. At the beginning of the year, the market risk appetite fell, the demand for institutional allocation was strong, and the expectation of continued monetary easing was superimposed, the yield of the bond market fell sharply from January to February, and the policy tone of the two sessions in early March did not exceed market expectations, and the yield accelerated downward.
During the reporting period, the yield of 10Y treasury bonds fell by 26BP, the yield of 30Y treasury bonds fell by 36BP, the yield of 10-year CDB bonds fell by 26BP, and the yield of credit bonds generally fell by 20-30BP.
Data source: Penghua Fengyi Bond Fund 2024 Q1 report
Investment review
In the first quarter of 2024, the Fund will flexibly adjust the remaining maturity and leverage level according to market conditions, and strive to improve portfolio returns while ensuring portfolio liquidity.
Investment strategy
In the first quarter of 2024, economic data showed signs of some marginal improvement. From January to February, the manufacturing PMI continued to be in the contraction range, but it rebounded slightly compared with December last year, and the manufacturing PMI rose above the boom and bust line in March. On the demand side, the growth rate of fixed asset investment rose slightly, infrastructure investment remained high, and the year-on-year decline in real estate development investment narrowed slightly. Consumption recovered moderately, with the number of trips and tourism revenue during the Spring Festival holiday both exceeding the same period in 2019, and the performance of service industry consumption remained better than that of goods consumption. In terms of exports, the year-on-year growth rate of exports from January to February rebounded from December last year, which was also significantly higher than market expectations. In terms of financial data, the year-on-year increase in new credit from January to February, coupled with the slow issuance of local bonds, jointly affected the growth rate of social finance. In terms of inflation data, the trend of PPI was relatively stable, and the year-on-year CPI in February turned positive for the first time since September last year due to the dislocation of the Spring Festival, and the core CPI excluding food and energy increased widely. Overseas, the year-on-year growth rate of US CPI and core CPI slowed down, the Federal Reserve kept the benchmark interest rate unchanged in the first quarter, and the market expected its interest rate cut to be delayed, and the US Treasury interest rate fluctuated and rebounded. Affected by factors such as the Swiss National Bank's unexpected interest rate cut, the yen did not rise but depreciated after the Bank of Japan raised interest rates, and the dollar index strengthened, the fluctuation of the RMB exchange rate intensified in late March. Monetary policy operations take into account multiple objectives and maintain reasonable and abundant liquidity. Throughout the quarter, the repo rate as a whole moved slightly downward, and the phenomenon of liquidity stratification eased significantly. Among them, the average value of DR007 was 1.87%, down 6BP from the previous quarter, and the average value of R007 was 2.13%, down 27BP from the previous quarter. In the first quarter, under the continuous care of the central bank, the capital side remained balanced and loose, and the yield of money market instruments fell significantly compared with the end of the previous quarter, of which the yield on the 1-year AAA certificate of deposit fell by about 17BP, the yield on the 1-year CDB bond fell by about 36BP, and the yield on the 1-year AAA short-term financing fell by about 20BP.
Data source: Penghua Jucaitong Money Market Fund's 2024 first quarter report
Note: The Fund is co-managed with Fund Manager Fang Li
Investment review
During the reporting period, the Fund tracked the underlying index, maintained portfolio liquidity under the premise of controlling tracking error, and strived to increase investment returns, with good performance.
Investment strategy
In the first quarter of 2024, economic data showed signs of some marginal improvement. From January to February, the manufacturing PMI continued to be in the contraction range, but it rebounded slightly compared with December last year, and the manufacturing PMI rose above the boom and bust line in March. On the demand side, the growth rate of fixed asset investment rose slightly, infrastructure investment remained high, and the year-on-year decline in real estate development investment narrowed slightly. Consumption recovered moderately, with the number of trips and tourism revenue during the Spring Festival holiday both exceeding the same period in 2019, and the performance of service industry consumption remained better than that of goods consumption. In terms of exports, the year-on-year growth rate of exports from January to February rebounded from December last year, which was also significantly higher than market expectations. In terms of financial data, the year-on-year increase in new credit from January to February, coupled with the slow issuance of local bonds, jointly affected the growth rate of social finance. In terms of inflation data, the trend of PPI was relatively stable, and the year-on-year CPI in February turned positive for the first time since September last year due to the dislocation of the Spring Festival, and the core CPI excluding food and energy increased widely. Overseas, the year-on-year growth rate of US CPI and core CPI slowed down, the Federal Reserve kept the benchmark interest rate unchanged in the first quarter, and the market expected its interest rate cut to be delayed, and the US Treasury interest rate fluctuated and rebounded. Affected by factors such as the Swiss National Bank's unexpected interest rate cut, the yen did not rise but depreciated after the Bank of Japan raised interest rates, and the dollar index strengthened, the fluctuation of the RMB exchange rate intensified in late March. Monetary policy operations take into account multiple objectives and maintain reasonable and abundant liquidity. The 1-year government bond is down 36bp, the 3-year government bond is down 26bp, the 5-year government bond is down 20bp, the 10-year government bond is down 27bp, the 1-year local government bond is down 31bp, the 3-year local government bond is down 36bp, and the 5-year local government bond is down 30bp.
Data source: Penghua's 5-year land bond ETF2024 first quarter report
Note: The Fund is co-managed with Fund Manager Ye Chaoming
Investment review
The bond market performed better in the first quarter of 2024, with the China Bond Total Index rising 2.0% and the 10-year CDB yield falling 27BP.
Investment strategy
In the first quarter of 2024, the equity market as a whole showed a divergent trend, with the Shanghai Composite Index up 2.2%, the CSI 300 Index up 3.8%, the ChiNext Index down 3.9%, and the STAR 50 Index down 10.48%. The Fund made a moderate reduction in its equity position in January, but did not grasp the opportunities in the equity market in February and March, and its overall performance lagged behind the benchmark. At the industry level, the industries that performed better in the first quarter were mainly upstream oil, coal, non-ferrous metals, home appliances, banking and communications. The overall performance of dividend assets is better, and the performance of computing power is stronger in the growth direction. On the one hand, the current CSI 300 overall dividend yield has been significantly cost-effective relative to the 30-year treasury bonds, in the continuous adjustment of the real estate market, we see that the economic data in January-February 24 has stabilized significantly, the macro economy has shown obvious resilience, and the pessimistic expectations of the stock market for the macroeconomy are expected to be revised; At the same time, the AI industry is continuing to change, and it is expected that with the improvement of the capabilities of GPT-5 and domestic large models in 24 years, popular applications may be implemented, and we continue to pay attention to the progress of the AI industry.
Data source: Penghua Anyi Mixed Fund 2024 first quarter report
Note: The Fund is co-managed with Fund Manager Wang Shiqian
Investment review
In the first quarter, the portfolio increased duration and leverage, increased the allocation of high-grade credit bonds to increase static coupons, and carried out swing operations on long-end interest rate bonds.
Investment strategy
The U.S. PMI, employment and other data in the first quarter continued to be better than expected, inflation rebounded, and the optimistic expectations for interest rate cuts at the beginning of the year quickly reversed. Commodities such as copper, crude oil, and gold, which are limited in supply in the medium term, have risen significantly. The demand of the real economy and financial conditions will continue to see-saw repeatedly, and the Fed's willingness to cut interest rates under election years and fiscal pressures is also worth paying attention to, exacerbating the risk of secondary inflation. Domestically, in the first quarter of 2024, domestic and external demand will be greatly differentiated, the focus of domestic policies will still be on structure rather than aggregate, the policy and investment in the science and technology industry represented by "new productivity" will be significantly strengthened, and the problems of real estate and local government debt will still be mainly risk prevention. Fiscal policy still emphasizes "tight days", monetary policy emphasizes "precision and effectiveness", in the context of good economic data in the first quarter, it is expected that the aggregate monetary policy will be relatively restrained, and structural tools will continue to exert force.
Data source: Penghua Fengtai Regular Open Bond Fund 2024 First Quarter Report
Note: The Fund is jointly managed with Fund Manager Yang Yajie
Investment review
The Fund seeks to achieve a higher level of return over the long term. At this stage, the equity index is in the historically low valuation quantile range, maintaining a relatively high level of equity positions in terms of operation, and actively participating in the offline subscription of new shares, convertible bonds and exchangeable bonds to obtain enhanced returns.
Investment strategy
In the first quarter of 2024, the macro economy as a whole is still in a bottom-shaking trend, the manufacturing industry as a whole is still the key direction of investment, the manufacturing industry continues to grow steadily driven by new productivity, infrastructure investment still maintains a moderate expansion, new real estate starts and completions remain weak, and the transaction volume of second-hand housing has been slightly enlarged, and the sustainability of the transaction volume needs to be continuously observed. The pace of the overall recovery of consumption remained stable, the mid-to-high-end consumption was weak, the low-end consumption remained stable, and the passenger traffic and consumption during the Spring Festival remained stable as a whole, with limited further improvement. External demand remains resilient and provides good support to the economy as a whole. In terms of finance, social finance remained at a relatively low level, the overall demand for credit was weak, and the adjustment of loan structure continued.
In the first quarter of 2024, the equity market declined rapidly at the beginning of the year, and the quantitative portfolio hit the market sharply, after which the market stabilized and recovered rapidly, the Shanghai Composite Index remained at the bottom of the area of shock, and the heavyweight stocks dominated by the Shanghai Composite 50 and CSI 300 performed steadily and did not show significant adjustments, and high dividends and low valuations are still the core areas pursued by the market. In terms of growth, the small market capitalization target pulled back sharply at the beginning of the year, and then the trend was significantly differentiated, with a strong rebound in the growth direction, benefiting from external demand, advanced manufacturing, etc., and most of the targets rebounded slightly after adjustment and maintained shocks. The overall valuation of the market is relatively safe, but the overall growth of the economy is weak, and the momentum for further valuation growth is limited. In terms of bonds, liquidity remained stable, and there was still room for further RRR and interest rate cuts, but the economic momentum was insufficient, and bonds were chased by funds as high-credit rating assets, and the overall yield curve moved downward, of which the long-term downward movement was obvious, driving the yield curve to further flatten.
Data source: Penghua Honghe Flexible Allocation Hybrid Fund 2024 First Quarter Report
Investment review
Bonds were bullish in the first quarter. The downturn in the stock market has led to a lot of money chasing assets with relatively certain returns, and the term spreads on long-end interest rates have been quickly repaired in the first quarter of this year, following the extremely low credit spreads last year. The 30-year Treasury bond was actively traded, with the largest downside of nearly 40bps in the first quarter, and the 10-year Treasury bond also broke through the long-term support line of 2.5% in late January and closed at 2.29% at the end of the quarter. Looking ahead, we judge the weak economic recovery pattern throughout the year, the actual impact on interest rates at the fundamental level is limited, and there are periodic disturbances in the issuance of ultra-long-term special treasury bonds, but they cannot change the interest rate trend.
Investment strategy
In the first quarter, the equity market opened and closed widely. The panic decline in January, the successive shocks of redemption, quantification, and integration exacerbated the negative feedback of the decline, and the small and micro cap stocks that had the advantage in the previous two years continued to fall. Entering February, the national team rescued the market, continued to buy 50, 300 and 2000 ETFs in a wide caliber, injected liquidity into the market, stabilized market confidence, and gradually stabilized the market. Entering March, the Shanghai Composite broke through 3000, the upward offensive was weak, the weak fundamentals were the main suppressing factors, the downward continued to have funds to support the bottom, the index began to fluctuate in a narrow range, the resource sector and commodity prices resonated in the month, and copper, aluminum, oil and gold rebounded sharply. In the first quarter, the dividend index led the gains, with an increase of 10%, and 50 and 300 also had positive returns. Micro-cap stocks rebounded after February, but it was difficult to make up for the fall in January, leading the decline in the quarter, -15%, and the CSI 2000 also fell by more than 10%. Looking ahead, we believe that weak recovery will remain the main theme of the year, and in such an environment, there is a lack of absolute economic mainline, and we are optimistic about the direction of low valuation, stable growth and supply constraints.
Data source: Penghua Zhehua One-year Holding Period Mixed Fund 2024 first quarter report
Note: The Fund is co-managed with Fund Manager Fan Jingwei
Investment strategy
The first quarter saw rare extreme volatility in the stock market, with a rapid decline in the bottom zone due to a lack of liquidity and crowded trading, and a rapid rebound after the Chinese New Year. The losses caused by being forced to sell due to various reasons in the first quarter will become our income compensation for volatile risks in the future. At present, small and mid-cap stocks are once again very attractive from the perspective of valuation and fundamentals. Fund managers are currently optimistic about the continuation of the export chain boom this year, and the bottoming out of the real estate chain, and increased the allocation of growth stocks in the electronics, pharmaceutical and other industries in the first quarter.
Data source: Penghua Anqing Mixed Fund 2024 first quarter report
Investment review
Looking ahead, the worst is over, and 2024 is a year of change, with abundant structural opportunities, both at home and abroad. At present, the market is still at a historical low, which makes the fault tolerance rate significantly improved, but the sectors and individual stocks are also facing differentiation, which requires our research and stock selection capabilities to increase accordingly, and we strive to excavate, track and grasp the opportunities of high-quality companies that conform to the general trend of the industry. In terms of investment paradigm, we are also continuing to update and iterate, and after the disappearance of industry beta, we should adjust the stock, grasp the variables, find the increment, and find a breakthrough to adapt to the current market. Under the stock market, the scarcity of stable and highly profitable companies appears, and the focus of investment strategy needs to shift from high profit margin to turnover improvement and leverage without decreasing, so as to tap excellent companies that meet the development characteristics of the times.
Investment strategy
Looking back at the first quarter of 2024, in terms of the macro economy, a moderate recovery is gradually ushering in. In the second half of 2023, in fact, the overall market expectations are relatively weak, and for sectors such as consumption, they were all in low expectations, and many sectors were in a low position, which brought us opportunities to build positions. In fact, in retrospect, many data are not as pessimistic as expected, such as education, tourism, hotels and other sectors, which are not as pessimistic as previously expected, showing the resilience of the economy, and this expectation difference is also an important source of confidence for us to choose to build a position at this point in time.
The Fund performed well in the quarter, on the one hand, because it increased the allocation of equity assets, and on the other hand, because the grasp of the structure was relatively in line with the current market. Previously, the Fund's allocation to A-shares had been at a low level, but during the first quarter, the Fund increased its allocation to equity assets. The main reason is that, first of all, the A-shares in early February have been very valuable for allocation, affected by the micro liquidity represented by the snowball, the nearby market in early February ushered in the bottom of the valuation, the price-earnings ratio, the premium rate of stocks and bonds, Objective indicators such as dividend yields all show that the market is at the bottom of a large historical level, and in early February, some panic declines brought about by trading structures and derivatives provide us with an excellent opportunity to build and improve our positions, and the economic environment is resilient, and the resilience of the entire economic market provides sufficient soil for industrial development, and we believe that the opportunity comes more from "structural industrial trend mining" rather than "large and comprehensive package allocation" Therefore, we choose to put more effort into industry and company research to explore sectors and companies with real alpha, so that we can pay more attention to the structural opportunities in the industrial chain.
In the selection of structural opportunities this quarter, the Fund has increased the layout of opportunities in the fields of education, Huawei's industrial chain, AI applications, and resource products through a combination of top-down sector selection + bottom-up target selection.
First, the education industry: the education industry is a long-term demand for the industry, and the policy adjustment in the past few years, so that the industry has experienced a reshuffle and clearing, at this stage, the demand of the education industry is still very strong, and the supply has experienced clearing and contraction, then "strong demand + supply contraction" This investment model is very attractive, and in our research on the industry, we can also see that the head education companies have become more competitive after the reshuffle of the industry pattern, and many education and training head companies are expected to break through new highs in the past two years. The background of "strong supervision" makes it difficult to make up for the supply of the education industry, which also means that the education industry will maintain this good competitive pattern for a considerable period of time in the future, that is, the performance of the head companies will continue to improve.
Second, Huawei's industry chain: In recent years, Huawei has made continuous breakthroughs, and we are good at mining in the upstream and downstream of the industry chain, and there is room for exploration in Huawei mobile phones, 5.5G, Huawei automobiles, Huawei Ascend and other sectors. Huawei is considered by the United States to be one of the most important competitors, and the overall United States is also weakening the clamping factors of Huawei, we believe that after the accumulation of the past few years, Huawei's industrial chain will be a concentrated manifestation of quantitative change to qualitative change in the next two years. First of all, one of the protagonists in Huawei's industrial chain, Huawei mobile phones, the Mate60 series mobile phones, have returned, promoting Huawei to become the mobile phone manufacturer with the fastest growth rate in shipments in 2023. With the further escalation of the restrictions on high-end chips in the United States in recent years, the localization of semiconductors has ushered in rapid development, and with the further outbreak of demand for AI chips, domestic chips represented by Huawei will directly benefit. At present, Huawei's computing power chip is one of the few AI chips in China that can benchmark against NVIDIA A100, ranking firmly in the leading position of domestic computing power chips, and Huawei's related computing power industry chain is expected to usher in a period of rapid development, such as PCB suppliers are expected to share dividends.
Third, AI applications: After the AI industry chain has experienced a general rise in the first half of 2023, the future market may face differentiation, and downstream application opportunities are worth prospective research and grasp. We predict that the first quarter of this year may be the high point of NVIDIA's annual performance growth, so at this stage, we will pay more attention to the hardware level to the application level, and China, in the wave of scientific and technological revolution, itself is a hot spot for application development, and is better at transforming technology into products, and has a large number of investment opportunities on this path. Based on this idea, the Fund has gradually entered the AI application side. It is worth noting that this year's AI market is different from last year's, and the industry has made more and more substantial progress. At the same time, this year, AIPC and AI mobile phone manufacturers have been released one after another, and more applications will emerge after the hardware is improved.
Fourth, resource goods: With the gradual recovery of the global economy, resource products that are limited on the supply side but benefit from the global economic recovery on the demand side, such as industrial metals represented by copper, are also an investment direction that can be attacked, retreated, and defended. Taking copper as an example, in the long run, the long-term capital expenditure of copper mining enterprises is insufficient, and the weakening of resource endowment caused by the decline in ore grade is superimposed, and the supply side continues to be limited.
Data source: Penghua Hongxin Mixed Fund 2024 first quarter report
Note: The Fund is jointly managed with Fund Manager Siu Ka Sin
Investment review
In terms of specific operations, the fund has always adhered to the pursuit of stable returns under the premise of controlling drawdown. The bond allocation varieties are mainly short- and medium-term varieties with relatively stable returns. In terms of stocks, on the premise of controlling the total position, we will dig deeper into the sectors that are in line with the medium and long-term economic and industrial development trends with a margin of safety in valuation.
Investment strategy
In the first quarter of 2024, the environment of the domestic financial market is in strong contrast with a year ago, and after the "high opening and low walking" of the risk appetite of the whole society in 2023, the risks and hidden dangers of the real estate market continue to attract attention, starting from the first trading day of the beginning of 2024, the decline of A-shares has accelerated, and it was not until early February that the downward spiral has been alleviated. Correspondingly, the 30-year Treasury yield has continued to renew record lows, while the 30-year and 10-year term spreads have also broken through past extremes and narrowed to less than 20bp. Behind all of this is a decline in income expectations, investment expectations, and risk appetite. However, at the level of the real economy, the situation in the first quarter is not so pessimistic, the CPI in February has turned from negative to positive to 0.7, and the PMI in March has greatly exceeded expectations to 50.8. At the same time, the stock markets of the United States and Japan have risen significantly, the bright spots of scientific and technological innovation are frequent, the Fed's interest rate cut expectations have risen, and the overall financial market environment has continued to improve.
Data source: Penghua Hongyu One-year Holding Period Mixed Fund 2024 First Quarter Report
Investment review
Bonds were bullish in the first quarter. The downturn in the stock market has led to a lot of money chasing assets with relatively certain returns, and the term spreads on long-end interest rates have been quickly repaired in the first quarter of this year, following the extremely low credit spreads last year. The 30-year Treasury bond was actively traded, with the largest downside of nearly 40bps in the first quarter, and the 10-year Treasury bond also broke through the long-term support line of 2.5% in late January and closed at 2.29% at the end of the quarter. Looking ahead, we judge the weak economic recovery pattern throughout the year, the actual impact on interest rates at the fundamental level is limited, and there are periodic disturbances in the issuance of ultra-long-term special treasury bonds, but they cannot change the interest rate trend.
Investment strategy
In the first quarter, the equity market opened and closed widely. The panic decline in January, the successive shocks of redemption, quantification, and integration exacerbated the negative feedback of the decline, and the small and micro cap stocks that had the advantage in the previous two years continued to fall. Entering February, the national team rescued the market, continued to buy 50, 300 and 2000 ETFs in a wide caliber, injected liquidity into the market, stabilized market confidence, and gradually stabilized the market. Entering March, the Shanghai Composite broke through 3000, the upward offensive was weak, the weak fundamentals were the main suppressing factors, the downward continued to have funds to support the bottom, the index began to fluctuate in a narrow range, the resource sector and commodity prices resonated in the month, and copper, aluminum, oil and gold rebounded sharply. In the first quarter, the dividend index led the gains, with an increase of 10%, and 50 and 300 also had positive returns. Micro-cap stocks rebounded after February, but it was difficult to make up for the fall in January, leading the decline in the quarter, -15%, and the CSI 2000 also fell by more than 10%. Looking ahead, we believe that weak recovery will remain the main theme of the year, and in such an environment, there is a lack of absolute economic mainline, and we are optimistic about the direction of low valuation, stable growth and supply constraints.
Data source: Penghua Stable Hengli Bond Fund 2024 first quarter report
Data and views are sourced: 2024 fund first quarterly report, the fund's past positions do not represent the current and future positions, the market is risky, and fund investment should be cautious.
The risk disclosure of promotional materials is as follows
Dear Investors,
The above views only represent the personal views of the fund manager, do not represent the views of the fund manager, do not constitute actual investment advice, and do not represent the fund's past and future holdings. Investment is risky and should be cautious. A publicly offered securities investment fund (hereinafter referred to as a "fund") is a long-term investment tool, and its main function is to diversify investments and reduce the individual risks brought about by investing in a single security. Unlike financial instruments such as bank savings that can provide fixed income expectations, when you buy fund products, you may not only share the income generated by the fund's investment according to your holdings, but also bear the losses caused by the fund's investment.
Before you make an investment decision, please carefully read the fund contract, fund prospectus and fund product key facts statement and other product legal documents and this risk disclosure, fully understand the risk-return characteristics and product characteristics of the fund, carefully consider the various risk factors existing in the fund, and fully consider your own risk tolerance according to your own investment objectives, investment period, investment experience, asset status and other factors, and make rational judgment and prudent investment decisions on the basis of understanding the product situation and sales suitability opinions. In accordance with relevant laws and regulations, the fund manager Penghua Fund Management Co., Ltd. and the relevant sales agencies of the fund make the following risk disclosures: 1. According to the different investment objects, the fund is divided into different types such as stock funds, mixed funds, bond funds, money market funds, funds of funds, commodity funds, etc., and you will get different income expectations for investing in different types of funds, and the greater the risks you will bear. 2. The fund may face various risks in the process of investment and operation, including market risks, as well as the fund's own management risks, technical risks and compliance risks. Huge redemption risk is a risk unique to open-end funds, that is, when the net redemption application of a single open-day fund exceeds a certain percentage of the total fund shares (10% for open-end funds, 20% for regular open-ended funds, except for special products specified by the China Securities Regulatory Commission), you may not be able to redeem all the fund shares applied for in a timely manner, or the payment of your redemption may be delayed. 3. 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Please read the specific risk disclosure carefully to confirm the product features. 4. If the product you purchase is a fund managed by the manager, and the fund manager divides the fund assets into two or more asset units, and entrusts two or more third-party asset management institutions to act as investment advisers to provide investment advice for specific asset units, the investment in the product needs to bear the specific risks brought about by the entrusted investment adviser, such as the risk that the investment adviser does not provide investment advice as agreed, and the risk that the investment adviser no longer meets the employment conditions and needs to be changed. Please read the specific risk disclosure carefully to confirm the product features. 5. 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