Recently, the equity market has risen and fallen, and many investors hope to find a product that can obtain "calm" in mood and investment. Among them, some people have paid attention to the Wells Fargo Industrial Bond under the Wells Fargo Fund, which is understood to be a first-class bond base that can make people's emotional value full and increase the value of assets.
Its specific characteristics are as follows:
As of the end of 2023 (only represents the data at the point in time, not the future), its fund net assets exceeded 7.8 billion yuan, reaching 7.853 billion yuan;
It was established on 5 December 2011 and has been producing returns in each of the 12 full fiscal years, with the highest annual increase of 15% (Note: Data consolidated from Wind, regular report of the fund, as of 31 December 2023)
Annual performance of the Fund since its inception:
Note: Data is consolidated from Wind, the Fund's periodic report, as of December 31, 2023
It is very pure, judging from the data at the end of 2023, it is mainly invested in the issuance of bonds by enterprises, and in recent years, it has begun to increase the proportion of financial bonds;
Note: The data is synthesized from Wind, the fund's regular report, as of December 31, 2023, is only node data and does not indicate the future.
It is good at controlling risks, and as of the end of 2023, more than 87% of the bonds selected have a credit rating of AAA.
Note: The data is synthesized from Wind, the fund's regular report, as of December 31, 2023, is only node data and does not indicate the future.
It is very popular, with regular reports showing that by the end of 2023, it accounted for 74% of the share of institutional investors, and the number of institutional investors increased from more than 8,000 at the end of 2012 to 1.03 million by the end of 2023. (Note: The data is synthesized from the regular reports of Wind and the fund, as of December 31, 2023, and is only node data and does not represent the future)
Note: The data is consolidated from the regular reports of Wind and the Fund as of December 31, 2023
Not only that, from the perspective of the market value of all FOF holdings, it is the product with the largest market value under Wells Fargo Fund, reaching 867 million yuan. (Note: The data is consolidated from the FOF Fund's periodic report, as of December 31, 2023)
It is the Wells Fargo Industrial Bond (fund code: Class A 100058 / Class C 007075).
Investment and wealth management, subscribe or subscribe to fund products, you need to obtain the corresponding product value.
In general, what is the composition of product value?
Product Value = Asset Value + Functional Value + Sentiment Value
When we pay money or labor, what we want to get is the corresponding product value, and the product value includes asset value, functional value, and a value that has attracted much attention in recent years - emotional value.
Asset value, as the name suggests, is the return that can be obtained by investing in a certain type of asset, such as investing in stocks, funds, etc.;
Functional value, it is easy to understand, we buy clothes and shoes, buy vegetables and cook, buy houses and property, buy cars and ships, in order to obtain their functional value and meet the needs of clothing, food, housing and transportation.
What is the value of emotion? The difference between the emotional benefit and the emotional cost perceived by the customer. In layman's terms, can it make users happy, happy, satisfied, and less afraid.
In the case of extreme market volatility, investors urgently need a type of investment that can not only have "asset value", but also create emotional value. This type of primary debt base, represented by Wells Fargo Industrial Bonds, can provide investors with excellent emotional value.
Why is it a rich country industrial bond? In the face of violent market fluctuations, it is still trying to achieve good income performance.
Judging from the latest data, data from Galaxy Securities shows that as of March 31, 2024, the yield of Wells Fargo Industrial Bonds in the past 1 year ranks in the top 1/3 of similar ordinary bond funds (convertible bonds) (Class A), with a specific ranking of 71/272.
Note: The net value growth rate of Wells Fargo Industrial Bond Class A and its performance comparison benchmark from 2012 to 2023 is 9.68% (3.60%), 0.90% (-0.47%), 15.05% (10.34%), 9.35% (8.15%), 0.54% (1.85%), 2.28% (0.24%), 6.93% (8.22%), 6.63% (4.59%), 3.21% (2.98%), 5.22% (5.09%), 2.15% (3.31%), 4.43% (4.78%), previous fund managers: Huang Jiliang 2016-09 to present, Wu Lei 2017-03 to present. Source: Fund's periodic reports. The above performance data refers to Class A shares, and the past performance and evaluation results of the fund are not indicative of the future performance of the fund. Funds are risky and should be invested with caution.
As mentioned earlier, this drama has two "male protagonists". Huang Jiliang currently serves as the assistant to the general manager of Wells Fargo Fund, the general manager of the fixed income investment department and the general manager of the fixed income strategy research department of Wells Fargo Fund, with 16 years of experience in the securities industry and 11 years of experience in fund management; Wu Lei currently serves as the deputy general manager of the fixed income investment department of Wells Fargo Fund, with 13 years of experience in the securities industry and 7 years of experience in fund management. Managed by Shuangqiang fund managers, they will jointly provide advice and suggestions for the long-term steady appreciation of assets of Wells Fargo Industrial Bonds.
Huang Jiliang
General Manager of Fixed Income Investment Department of Wells Fargo Fund
Wu Lei
Deputy General Manager of Fixed Income Investment Department of Wells Fargo Fund
According to the fund's regular report, investment in credit products is one of the important features of Wells Fargo industrial bonds, and the industrial bonds referred to are all credit products, including corporate bonds, enterprise bonds (excluding urban investment bonds), medium-term notes, short-term financing bonds and separable bonds.
How will the "interpretation" of Wells Fargo industrial bonds continue in 2024?
The "playbook" reads as follows: In 2024, Wells Fargo Industrial Bonds will continue to focus on the selection and allocation of industrial credit bonds, flexibly adjust duration and leverage according to market changes, and moderately increase the allocation of low-priced convertible bonds, striving to obtain long-term sustainable investment returns for holders.
The logic of the specific "plot" deduction is as follows:
Medium- and long-term Treasury yields have reached low levels, with the 10-year yield below 2.4%, but real interest rates remain high. In the context of weak economic expectations in the previous period and limited decline in money market interest rates, the yield curve has flattened and term spreads have narrowed significantly.
It is expected that with the opening of policy space, the liquidity of the money market is expected to be further relaxed, so in the case of narrowing term spreads, the cost performance of short-end varieties will increase, and long-end yields may show a volatile trend. In terms of convertible bonds, after the decline in the fourth quarter of last year and January this year, the absolute price of convertible bonds is at a low level, and the protection of the debt base has emerged, which has allocation value.
(Note: Quoted from the 2023 Annual Report of Wells Fargo Industrial Bonds)
When watching dramas, we often pay attention to the inner thoughts of the protagonists, what do fund managers think about the bond market and Wells Fargo industrial bonds?
On April 13, Wu Lei, manager of Wells Fargo Industrial Bond Fund, expressed his latest views when participating in the Morningstar Investment Summit - "Fixed Income and Equity Investment Issues in the New Situation" roundtable forum.
Wells Fargo fund manager Wu Lei (first from right) attends the Morningstar Investment Summit
Q1: Will 2024 continue the divergence between stocks and bonds in 2023?
In 2024, the bond market is likely to maintain a bullish pattern, but volatility will increase, the equity market may perform better than expected at the beginning of the year, and the returns of the two major asset classes may converge.
The main logic is as follows:
● First, the macro economy will continue to recover in 2024, but the recovery may be relatively moderate due to factors such as the drag of the real estate cycle and the high propensity of residents to save;
Second, in terms of policy, although the fiscal policy will be strengthened, the multiplier effect may be weak due to the impact of chemical debt, and the monetary policy will still maintain gradual easing because of the constraints of external factors, so that the current round of interest rate cut cycle will continue for a long time. The bond market pays more attention to domestic demand and monetary policy, so the bond market will continue to be bullish.
For the equity market, the index will not perform too badly in years when external demand is better, and it has also reflected pessimistic expectations about structural problems in the economy. Furthermore, the equity market faced certain pressure on the supply and demand of funds before, but with the strengthening of the supervision of new share issuance, the policy also encourages dividends, and the pressure on the supply and demand of funds in the equity market may be eased, which is also conducive to the improvement of risk appetite.
Q2: In the low interest rate environment, what opportunities and challenges will fixed income investment usher in, and what should investors expect from bond fund investment?
While nominal bond yields have hit record lows, real interest rates are not low when inflation is taken into account. How reflation is achieved will determine the opportunities and risks in the bond market.
If the monetary policy exerts more force and adopts a larger RRR and interest rate cut to push up inflation, then the bond market as a whole still faces greater investment opportunities;
If, as in developed countries, fiscal policy is significantly stronger, then even if monetary policy is coordinated, bond market expectations may move ahead, and yields will face upside risks.
Against the backdrop of a significant reduction in both the absolute yield level and the broad-spectrum interest rate, the expected return on investing in a bond fund will certainly decline. Financial investment essentially serves real investment, and the expected rate of return on financial investment can only rise if the return on physical investment increases.
In addition, the volatility of the bond market may increase in the future, which will amplify the net value fluctuation of bond funds, but bonds, as fixed income assets, are the real "friends of time", so the income of investing in bond funds should be extended for a long time. In addition, it is also necessary to compare with other assets in terms of profitability, security, liquidity, etc.
Q3: Based on the present, what would you like to say to investors?
Looking forward to 2024, judging from the current market situation, the bond market is likely to maintain a bullish pattern, but volatility will intensify. However, as a fixed income asset, bond funds have the effect of risk hedging with many assets, and investors can allocate them according to their own risk tolerance.
The sharp rise of gold and the rise and fall of equity are easy to affect our emotions and cause violent fluctuations. Investing in financial management, just like all transactions, is to give time or money to get the corresponding product or service.
Paying the principal and taking higher risks may lead to higher returns, but the rollercoaster-like experience, not to mention the sense of gain, is not high in a volatile market.
Pay the principal, choose a type of asset that can provide stable emotional value, the hope of harvest in stability, a stable mood, and boundless happiness~
The emotional value is full, the asset value is increased, and the holding value can be expected, it is the Wells Fargo Industrial Bond, a bond base that steadily pursues the growth rate of net value, prudently selects low-risk credit bonds, and is jointly managed by dual fund managers, and a bond base that is worth holding for a long time.
Wells Fargo Industrial Bonds
Fund Code Class A: 100058
Fund Code Class C: 007075
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