The capital market ushered in the new "National Nine Measures", pointing at the shortcomings of the market and guiding high-quality development. At present, the stock of the convertible bond market has exceeded 800 billion yuan, as an important part of the development of the capital market, is also expected to be affected by the policy support, a number of institutions believe that the future of listed companies credit quality and default recovery rate or will be more considered in the pricing of convertible bonds, at the same time, the strengthening of cash dividend supervision of listed companies or will further enhance the long-term allocation value of dividend convertible bonds.
In this context, through indexation, a basket of convertible bonds with higher ratings is preferred, which has become an investment method that conforms to the policy orientation. SSE Investment Grade Convertible and Exchangeable Bond Index (950041. CSI), for example, this index only includes convertible bonds and deliverable bonds of the Shanghai Stock Exchange AA and above, with low credit risk and strong market and dividend characteristics, as of April 19, the index has risen 3.31% this year (data source: Wind).
HFT SSE Investment Grade Convertible Bond ETF (SSE Convertible Bond ETF, fund code: 511180) tracks this index and is a high-quality choice among the few convertible bond ETF products!
"Refers to" the selection of high-quality convertible bonds
In recent years, indexed investment has become popular, and convertible bonds with both equity and debt properties have also begun the trend of indexed investment. After nearly 4 years of investment operation, the performance and risk-return indicators of SSE Convertible Bond ETF are better than the average level of convertible bond funds.
Note: As of 2024/3/31, the source of fund performance data is the regular report of the fund, and the rest of the data comes from Wind, and the benchmark growth rate of performance in the past year and the past three years is 0.65% and 6.23% respectively. The classification of convertible bond funds in the whole market is wind-mainland public funds-fund concept-according to investment targets (concept)-convertible bond funds.
The robust performance of the Product is closely related to the composition of the underlying index. As of April 19, according to Wind data, there were 119 sample bonds of the SSE Investment Grade Convertible Bonds and Exchangeable Bond Index, all of which were rated above AA, including 26 AAA-rated targets, 24 AA+ rated targets, and 69 AA-rated targets.
As of April 19, the number of AAA, AA+ and AA rated convertible bonds in the whole market was 35, 52 and 134 respectively, accounting for only 40.7% of the total number of convertible bonds. It is enough to see that the rating distribution of the SSE investment-grade convertible bonds and exchangeable bonds index is significantly better than that of the convertible bonds in the whole market, which is a representative of high credit rating and good quality.
In addition, the balance of bonds of the constituent bonds exceeds 450 billion yuan, accounting for more than 56% of the stock of convertible bonds in the whole market, which has a strong representation in the market.
In terms of position characteristics, SSE convertible bond ETFs are dominated by bank convertible bonds with large scale, high margin of safety and dividend characteristics, and with these high-quality underlying ballast in the large market, the performance of the ETF is more stable, which is also in line with the current market style of preference for high dividends, high quality and high security. Institutions generally believe that the introduction of the policy will have an impact on the low-quality targets of the current convertible bond market in the short term, and it is recommended to switch to the large-market style with stable fundamentals of the underlying stock.
Outstanding liquidity advantages
As a bond ETF, SSE Convertible Bond ETF supports on-exchange T+0 trading, and information such as fund holdings, transaction prices and trading volumes are more transparent than actively managed products. (T+0 is subject to actual trading and brokerage.) ）
The liquidity of ETF products is also an indicator that investors pay close attention to. According to Wind, as of the end of March 2024, the average daily turnover of HFT SSE Investment-grade Convertible Bond ETF in the past one year was 194 million yuan. However, in the same period, only about 11% of the total daily trading volume of convertible bonds in the whole market was more than 100 million. The allocation of convertible bonds through indexation can effectively improve the efficiency of asset allocation of convertible bonds.
As the only single-market ETF in the Shanghai Stock Exchange, SSE Convertible Bond ETF has the advantage of facilitating arbitrage in the primary and secondary markets, so market makers can effectively keep its discount and premium within a small range for a long time.
The manager of this product, HFT Fund, is the fund company with the largest number of bond ETF layouts in China, and has a relatively complete system in the management of passive bond funds, and the investment and research force behind the SSE convertible bond ETF is complete, and the fund managers Chen Yiping, Tang Linger and Tao Feiran have rich experience in the management of passive bond funds, and there are analysts specializing in convertible bond research who are responsible for the tracking and research of convertible bonds in different industries. At present, the scale of bond ETFs under management has reached 37.3 billion yuan (source: Wind, as of 2024/4/19), and the strength of fund managers should not be underestimated.
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Note 1: Index returns are not indicative of the future performance of the Fund, and the Fund's tracking of the underlying index may deviate. The net value growth rate of SSE Investment Grade Convertible Bonds and Exchangeable Bonds Index from 2019 to 2023 is 16.21%, 1.28%, 12.47%, -7.86% and 1.23%.
Note 2: The net value growth rate of the Fund from 2020 to 2023 is 0.99%, 10.90%, -8.03% and 0.65%, and the benchmark rate of return is 0.24%, 12.47%, -7.86% and 1.23%. Data source: Fund regular report, 2020 annual results are calculated from the effective date of the fund contract (2020/7/13). Previous fund managers: Chen Yiping (2020/7 to present), Lu Congfan (2020/7 to 2022/7), Tang Linger (2022/7 to present), Tao Feiran (2023/6 to present).
Note 3: According to the three-level classification of Galaxy Securities Fund, the Fund is classified as a bond ETF fund, and the performance of other similar funds managed by the fund manager is as follows:
1) The net value growth rate of the 10-year local government bond ETF2019-2023 is 5.30%, 2.64%, 4.67%, 4.39% and 4.07%, and the benchmark yield is 1.85%, -0.81%, 2.33%, 1.38% and 1.43%. Previous fund managers: Chen Yiping (2018/10-2023/12), Lu Congfan (2019/7-2022/7), Tang Linger (2022/7-present), Tao Feiran (2023/6-present);
2) The net value growth rate of the SSE 5-year local government bond ETF2019-2023 is 1.01%, 2.28%, 4.56%, 3.00% and 3.62%, and the benchmark yield is 1.31%, 0.47%, 1.89%, 0.37% and 0.68%, and the 2019 annual results are calculated from the effective date of the contract (November 7, 2019). Previous fund managers: Chen Yiping (2019/11 to present), Lu Congfan (2019/11 to 2022/7), Tang Linger (2022/7 to present), Tao Feiran (2023/6 to present);
3) The net value growth rate of HFT CSI Short-term Financing ETF2020-2023 is 1.07%, 2.82%, 2.14% and 2.40%, and the benchmark rate of return is -0.04%, 0.24%, -0.03% and 0.47%, and the 2020 annual performance is calculated from the effective date of the contract (August 3, 2020). Previous fund managers: Lu Congfan (2020/8-2022/7), Chen Yiping (2022/7-present), Tang Linger (2022/7-present), Tao Feiran (2023/6-present);
4) The net value growth rate of HFT SSE Urban Investment Bond ETF2019-2023 is 3.46%, 2.81%, 5.29%, 1.77% and 5.25%, and the benchmark rate of return is 1.63%, -1.00%, 1.13%, -1.63% and 2.56%, and the 2019 annual performance is calculated from the fund transition date (April 24, 2019). Previous fund managers: Chen Yiping (2014/11-present), Lu Congfan (2019/7-2022/7), Tang Linger (2022/7-present), Tao Feiran (2023/6-present).
Source: Fund's periodic reports.
Note 4: The SSE Investment Grade Convertible Bonds and Exchangeable Bonds Index is compiled and calculated by China Securities Index Company Limited, and its ownership belongs to China Securities Index Company Limited. China Securities Index Company Limited will take all necessary measures to ensure the accuracy of the index, but does not make any guarantee in this regard and shall not be liable to any person for any errors in the index.
Risk Warning: Mainland funds have been operating for a short period of time and cannot reflect all stages of market development. Past performance of a fund is not indicative of its future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of the performance of the fund. HFT Fund solemnly reminds you to pay attention to investment risks, please read the fund contract and fund prospectus carefully, and make independent decisions on fund investment according to your own risk tolerance, investment period and investment objectives on the basis of understanding the specific situation of the fund and listening to the suitability opinions of the sales agency.