Red Star Capital Bureau reported on April 28 that the recent performance of the bond market has been outstanding, and the medium and low-risk fund products represented by short- and medium-term bond funds continue to attract attention. However, on April 25, the short-term and medium-term bonds of Hony Yuanfang Fund fell by 0.68% in a single day, causing heated discussions in the market, while the net value of other short- and medium-term bond funds fluctuated steadily on the same day.
In this regard, Wu Yin, the fund manager of Hony Yuanfang's short- and medium-term bonds, issued an apology, saying that "I will re-straighten out the rhythm as soon as possible", but did not explain the reason for the sharp drop in net value in a single day. Some industry insiders told the Red Star Capital Bureau that "chasing ultra-long-term treasury bonds cannot be ruled out."
The bond base lost nearly three months of income in a single day
The fund manager came forward to apologize
According to the data, the A and C shares of Hony Yuanfang's short-term and medium-term bonds were established in May 2023, and the E shares were increased in January this year. As of the end of the first quarter, the latest scale of A, C and E shares was 169 million yuan, 761 million yuan and 71.7528 million yuan respectively, of which the C share increased by 32.07% compared with the beginning of the year.
From April 23rd to April 25th, the product fell for three consecutive days. On April 25, the shares of A and C fell by 0.68%, and the shares of E fell by 0.69%, almost losing the earnings of the past three months.
Wind data shows that on April 25, the CSI Composite Bond Index rose by 0.03%, the average net value of more than 300 short- and medium-term bond funds in the whole market increased by -0.01%, and the single-day net value of other short- and medium-term bond funds with large declines was only about 0.06%.
Screenshot from Tiantian Fund Network
Short- and medium-term bond funds have always been favored by investors due to their relatively low risk and better liquidity. The net value of a short- and medium-term bond fund fell sharply in a single day, and this phenomenon also sparked discussions on social platforms, with many people saying: "Isn't the bond base very stable?" and "Tomorrow with a fee (too) to run".
On the evening of April 25, the anchor of Hony Yuanfang Fund, "Jiajiahua Wealth Management", posted in the financial community, "Under the recent sharp market fluctuations, the manager's investment rhythm has been unstable, resulting in large fluctuations in net value, which has brought you a bad investment experience, which is really very sorry." He also said that after this major adjustment, the manager has also learned from the pain, re-straightened the rhythm, and will return to the previous route in the future.
On April 26, Wu Yin, the fund manager of Hony Yuanfang's short- and medium-term bonds, also issued an apology. In terms of liquidity, Wu Yin said, "The short- and medium-term bonds managed by me have always maintained a controllable asset portfolio ratio, low leverage, and continued to retain a reasonable proportion of cash management assets, and have made corresponding preparations for the liquidity management of the product to meet the demand for redemption under various circumstances."
Wu Yin also explained that one of the important sources of income for the bond base is coupons, "The bond base has encountered a drawdown, and even through continuous coupon accumulation, it will gradually recover its losses, which is expected to smooth out the losses caused by fluctuations." She said that after this major adjustment, she has deeply reflected and summarized, and will re-straighten out the rhythm as soon as possible.
Industry insiders: do not rule out chasing ultra-long-term treasury bonds
The central bank recently warned of long-term interest rate risks
Red Star Capital Bureau noticed that the fund manager's response did not directly explain the reason for the sharp drop in the net value of Hony Yuanfang's short-term and medium-term bonds in a single day. Some people said below the aforementioned apology article: "Is the decline in short- and medium-term bonds normal?" "The normal drawdown is acceptable to anyone, and now it is an abnormal plunge." ”
Some industry insiders told the Red Star Capital Bureau that from the fund manager's statement that he is "ready to respond to redemption needs", it is unlikely to be due to liquidity problems caused by huge redemptions, and the product's holdings are also relatively scattered from the first quarterly report, but "it is not excluded to chase ultra-long-term treasury bonds".
Screenshot from the first quarter report of Hony Yuanfang Short and Medium Term Bond in 2024
In this regard, on April 28, the Red Star Capital Bureau called Hony Yuanfang Fund to understand the situation, but did not receive a response as of press time.
Since the beginning of this year, the overall performance of the bond market has continued to be strong, and ultra-long-term treasury bonds have performed particularly well, with the yield of 30-year treasury bonds running below 2.5% for a long time. As long-term bond interest rates continue to fall, the central bank has repeatedly warned of relevant risks recently.
On April 23, the Financial Times published an interview with the relevant person in charge of the central bank on the continued decline in long-term government bond yields. The person in charge said that the long-term treasury bond yield mainly reflects the long-term economic growth and inflation expectations, but at the same time will also be disturbed by other factors such as supply and demand; the long-term treasury bond yield will generally run within a reasonable range that matches the long-term economic growth expectation, and the underlying logic of the current long-term treasury bond yield continues to decline is the lack of "safe assets" in the market, and with the issuance of ultra-long-term special treasury bonds in the future, the "asset shortage" situation will be alleviated, and the long-term treasury bond yield will also rise.
The person in charge also pointed out that "theoretically, fixed-rate long-term bonds have a long duration and are more sensitive to interest rate fluctuations, and investors need to attach great importance to interest rate risk." For transactional investors, by increasing leverage and extending the duration, they can get more benefits in the short-term price rise, but they are also prone to exacerbate market volatility and need to bear the losses caused by the sharp decline in prices. ”
Red Star News reporter Jiang Ziwen
Edited by Deng Lingyao
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