With interest rates falling to the lowest level in recent years and the equity market continuing to adjust, short-term bond funds are becoming more and more popular among investors. In the first quarter of this year, in addition to the cargo base, short-term bond funds became the public offering with the largest increase in shares, with an increase of 166.431 billion shares, and its overall scale also stood at the trillion mark.
In the past week, bond bulls have suffered a "sharp turn", and many short-term bond funds have been affected. For the adjustment of the bond market, industry insiders analyze that the market may enter a time window that is more sensitive to disturbance factors. Looking ahead, considering that the economic recovery is in waves and the real estate market is still in the bottom repair stage, the magnitude and risk of the interest rate rebound are expected to be controllable.
The scale stands in trillions
Wind data shows that in the first quarter of this year, in addition to money market funds, short-term bond pure debt funds received the largest share of holdings in all other fund types (only public offerings established before 2024 are counted), with an increase of 166.431 billion shares, and the number of shares of short-term bond pure debt funds also stood on the scale of trillions.
Among them, E Fund Wenyue 120-day rolling short-term bond C, Harvest short-term and medium-term bond A, CUAM Fufeng Short-term Bond C, and ChinaAMC short-term bond A all increased their holdings by more than 5 billion shares in the first quarter of this year, while the number of additional shares of E Fund Wenyue 120-day rolling short-term bond C was close to 10 billion, while the fund's C share was only 986 million shares at the end of 2023.
CUAM Fortune Run Short- and Medium-term Bond C is fanatically "absorbing gold" or due to its brilliant performance. In the first quarter of this year, the net value growth rate of the fund's C share was 2.55%, far exceeding the benchmark return of 0.87%. Among all short-term bond pure bond funds, the fund's return performance in the first quarter was among the highest.
In the first quarter of 2024, Yang Jing, fund manager of CUAM Fortune Short-term Bonds, introduced that the fund mainly allocates high-grade bonds within 3 years, and flexibly participates in market transactions. In comparison, the fund's C share soared from 705,800 at the end of 2023 to 5.773 billion at the end of the first quarter of 2024, ranking among the top among all short-term bond pure debt funds.
In the first quarter of this year, the net value growth rate of Harvest short-term bond A and ChinaAMC short-term bond A was more than 1.1%, exceeding their respective performance benchmarks and the average yield of short-term bond pure bond funds. Li Jincan, fund manager of Harvest short- and medium-term bonds, said that the fund flexibly used short-term leveraged resources to increase portfolio returns, while Liu Mingyu, fund manager of ChinaAMC short- and medium-term bonds, said that the fund allocated reasonable positions and durations to bond assets, and carried out certain swing operations according to market conditions.
The configuration requirements continue to increase
Since 2023, interest rates have fallen to the lowest level in recent years, and the equity market has continued to adjust, and CICC's research department has observed that short-term bond funds focusing on short-duration credit coupon strategies have attracted more and more attention from individuals and institutions. Although medium and long-term pure bond funds have relatively superior returns, short-term pure bond funds have more advantages in terms of safety and liquidity.
As an alternative to wealth management products after the new regulations on asset management, the allocation of short-term bond funds on the individual side continues to rise. In recent years, fund companies and sales channels have also increased their publicity for such products. Industry insiders said that the e-commerce side is an important "volume" channel for short-term bond funds. At present, whether it is in the banking app, the third-party Internet sales platform, or the social platform of various fund companies, the third-party platform Fortune account, the live broadcast platform, etc., such products are generally placed in an important position on the homepage of publicity.
On third-party platforms, fund companies, "big V", people and other participants often refer to the income of 1 basis point (0.01%) of the debt base as "one egg". Through the simple and easy-to-understand daily "egg collection" broadcast, supplemented by the corresponding market interpretation and "emotional value", in such a language environment, the fund company and the "big V" quickly narrowed the distance between them and the people. On this basis, short-term bond funds have quickly attracted a large number of individual investors to participate in the volatile market environment by virtue of their relatively stable income performance.
In addition, in recent years, institutional investors have also increased their attention to short-term bond funds. According to the analysis of CICC's research department, on the one hand, although the annual return level of medium and long-term pure bond funds is mostly ahead of that of short-term pure bond funds, the overall income gap between the two is relatively small;
In addition, the research department of CICC said that short-term bond funds as a whole are more inclined to adopt the short-duration credit coupon strategy, and when the interest rate range is lower and the interest rate level is expected to rise in the future, short-term bond funds are relatively less affected by interest rate risk, and their static income may be able to better cover the loss of capital gains. At the same time, due to its relatively better liquidity, for institutional holdings, the redemption and liquidity ability in the event of a risk event is relatively strong.
The rebound in interest rates is expected to be manageable
In the past week, bond bulls have suffered a "sharp turn", and many short-term bond funds have been affected. Wind data shows that from April 24 to April 26, Hony Yuanfang's short-term bonds fell by 80 basis points, and the net value of the fund retreated to the level at the end of January this year, while short-term bond funds such as Zheshang Huijin Juying Short-term Bonds and China Universal Short-term Bonds also fell by more than 30 basis points.
The fixed income team of Zheshang Securities said that the follow-up market may enter a time window that is more sensitive to disruptive factors, and the adjustment may exceed several other adjustments since the beginning of 2024.
On the one hand, the People's Bank of China, the Ministry of Finance, and the National Development and Reform Commission have recently revised the lower limit of long-term bond yields upwards, and there may be incremental disturbances in the follow-up to drive the "short-term cautious" sentiment to continue to rise;
Looking ahead, the fixed income Tan Yiming team of Minsheng Securities believes that the current macroeconomic picture may not support long-term interest rates to break through the previous low level, but considering the wave-like operation of economic repair and the real estate market is still at the bottom of the repair, the magnitude and risk of interest rate rebound are expected to be controllable. In addition, if the People's Bank of China (PBoC) carries out treasury bond operations, it is expected that the bank will purchase treasury bonds first considering the low proportion of treasury bonds held by the bank in the short term, which will alleviate the impact on the supply side and liquidity to a certain extent, which will be good for the bond market.