Investors seek stability as well as liquidity
Bonds and "fixed income +" products are popular
China Fund News reporter Wu Jun
This year, private bond products are popular among investors in the channel, according to the reporter's understanding, some of the private placement products of the distribution channel sell small hits; Even the brokerage channel that prefers equity products is now discussing with private equity to issue "fixed income +" products; In addition, high-net-worth clients have significantly increased the allocation ratio of bond products. However, private equity reflects that customers prefer to allocate bond products with better liquidity, on the one hand, to seek stability, and on the other hand, they also expect to quickly switch allocations when the stock market rises in the future.
However, the decline in bond yields has also become a problem that cannot be ignored, and some private equity bluntly said that this year is a very difficult year for bond investment, so private equity is exploring multi-asset allocation, such as increasing high-dividend stocks, quantitative neutrality, REITs, etc., and making up for income through the development of "fixed income +" products.
Private bond products are popular, and customers seek stability and liquidity
"This year, bond products are popular with high-net-worth customers, and we have sold a good amount in the distribution channel, but there are also redemptions. Now brokerages are talking to us about the intention of selling 'fixed income +' products, because pure stock products cannot be sold. Now that the risk appetite of customers has declined, I have a direct sales customer who originally only allocated one or two percent of bond products, but after experiencing market fluctuations in recent years, the allocation ratio has risen to more than fifty percent. A person in the private bond market told reporters.
Zhang Shenggang, general manager of Liwei Investment, said that since last year, the company's pure bond products have been favored in the market, and the sales scale of pure bond series has maintained rapid growth; At the same time, the number of new large-scale sales channels is also rising; However, the sales volume of "fixed income +" products has maintained steady growth this year after a significant increase in the past two years. "At present, investors' demand is biased towards stable and low-volatility products, and due to the significant effectiveness of the macro rotation timing model, the company's 'fixed income +' products have also brought customers a better holding experience in the past two years."
A medium-sized bond private market source said that on the one hand, stable customers want certainty and prefer pure fixed income products; On the other hand, some customers bought "fixed income +" products at the end of last year, and now they are profitable, "they feel very fragrant and will continue to buy them." ”
From the perspective of channels, the researcher of Haomai Fund said frankly that since the beginning of this year, a lot of funds have poured into the bond market, including many individual investors who have participated in the investment of ultra-long-term treasury bonds through banking channels; At the same time, the subscription of private bond products is also relatively active, and the stock products of some leading private equity managers have increased considerably since the beginning of this year. Overall, retail investors still have a strong demand for stable fixed income products, but their expectations for returns are not fully in sync with the decline in bond yields.
Zeng Hengwei, a wealth financial planner at Paipai.com, said that this year, the performance of bond strategy private placement products is leading, and nearly eighty percent of them have achieved positive returns, so they are favored by investors. At present, many investors prefer products with high security, low volatility and good liquidity as the underlying allocation. There are also investors who choose high-yield bond products, and some pay attention to the opportunity of the Federal Reserve to cut interest rates and allocate overseas U.S. bonds.
Jiang Rui, a researcher at Grid Fund, also said that in the past two years, most of the customers have demanded to obtain certain stable returns on the premise of maintaining liquidity, but more professional customers may have certain investment needs for medium and high-yield bonds, and they will choose assets with a certain beta based on their judgment of the macro environment and large types of assets. From the perspective of the whole market, the sales of overseas US bond products or Chinese US dollar bond products are relatively hot this year.
In addition, according to the data of the private placement network, a total of 136 bond strategy products have been filed this year, including Yuankang Investment, Aifang Assets, Silver Leaf Investment, Ningshui Capital, Duration Investment, etc.
Falling bond yields have become a problem, and private equity is exploring multi-asset allocation
Although investors are now more allocated to private bond products, declining yields have also become an issue that cannot be ignored. In this context, the concept of private bond exploration of multi-asset allocation, the development of "fixed income +" products to make up for returns, and the expectation of upward flexibility when the stock market rises in the future, this concept has also been recognized by many investors.
"At present, the yield benchmark of fixed income products in the banking channel is being lowered, for example, from 3 months to half a year, it has fallen to less than 3%. The relatively higher yield benchmark of private equity products is inevitably affected by the decline in bond market returns. Even so, there are still many customers who are willing to buy, the mentality is to seek stability, and they prefer bond products with better liquidity, even if the yield is low, it doesn't matter, because they are not sure when the stock market will rise, first put money in the money market, and wait until the stock market rises and redeem it immediately. A senior private bond market source said.
Hesheng Asset Management bluntly said that this year is a very difficult year for bond investment, because the credit spread and maturity spread of bonds are very flat. "We try to explain the logic of our investment and operation and research to the client as clearly as possible. By stabilizing the client, it can give us a longer period of funds to make counter-cyclical investments, such as grasping the opportunity to buy the bottom in the volatility, to obtain some additional benefits of buying low and selling high. In addition, the 'fixed income +' product did not invest in stocks and commodities, but made some moderate expansion in assets such as REITs. ”
Zhang Shenggang also said that the macro environment of loose money and tight credit has lasted for a long time, and in the process of continuous decline in yields, they will focus more energy on multi-asset allocation and optimize more types of fixed income assets, such as low dividend volatility, overseas interest rates, convertible bonds, etc. "At this stage, our 'fixed income +' and all-weather products of large assets will allocate assets such as A-shares, U.S. stocks, U.S. bond interest rates, and gold to varying degrees."
Silver Leaf Investment said that it will expand the main body of the bond pool and increase the coverage of the company's main body. At the same time, it continues to expand its asset class, including convertible bonds, deliverable bonds, REITs and low-risk OTC derivatives structures. In terms of "fixed income +" products, the allocation of high-grade convertible bonds has been increased to replace some credit bond assets with relatively low yields.
According to Jiang Rui's observation, in the low interest rate environment, private bond placement has been seeking more sources of income, and many institutions have developed new product lines, such as fixed income +, convertible bonds, Chinese dollar bonds, etc. The "fixed income +" products in the market are roughly divided into two categories: one is to use high-dividend stocks or convertible bonds to increase income, and the other is to use derivatives or neutral strategies to do so.
Researchers from Haomai Fund also said that the coupon income of bonds has narrowed, and private bond placements will consider finding more sources of income through duration operations, spread trading, etc., or through overseas bonds, such as Chinese-funded dollar bonds and dim sum bonds. "At present, 'fixed income +' products mainly add convertible bonds and deliverable bonds, and a small number of them will add stocks, quantification, derivatives and other strategies."
Zeng Hengwei said that the current private "fixed income +" products mainly increase equity assets, convertible bonds, etc., choose stable dividend assets, and optimize the investment portfolio.
Grasp the multiple opportunities in the market in a balanced manner
In the first half of the year, the yield of the private bond strategy reached about 4%.
China Fund News reporter Wu Jun
Despite the pullback in the past month, the private bond strategy still leads the way with an overall return of 3.89% this year. Research institutions believe that mainly affected by the volatility of convertible bonds, the debt base has withdrawn, but some private placements have maintained stable performance by strictly controlling risks such as reducing duration.
A number of private placement bonds said that in the first half of this year, through the balanced allocation of assets such as interest rate bonds, credit bonds, and state-owned enterprise dividend bonds, they actively grasped a variety of opportunities in the market and achieved good returns.
This year, the yield is still around 4%, and the private placement of bonds is strictly controlling risks in the midst of volatility
According to the data of the private placement network, although the overall return of the private bond strategy in the past month was -0.40%, the proportion of positive income products was about 57%, and the performance retreated slightly. However, since the beginning of this year, the overall return of the private bond strategy is still as high as 3.89%, and the positive return accounts for about 75%.
According to the statistics of the Haomai Fund Research Center, as of June 14, the average return of bond funds this year was 2.78%, and the return of CSI composite bonds was 3.38% in the same period. The researcher of Haomai Fund said that the recent adjustment of the bond market is mainly affected by the adjustment of the stock market, and the conversion of bonds has rebounded, and the market is worried about the risk of delisting and default of small and medium-sized listed companies, and the decline of low-priced convertible bonds has been larger. "However, benefiting from the bond bull market driven by the 'asset shortage', the overall performance of bond private placement products has been relatively good this year, and some products participating in the conversion of bond investment have withdrawn significantly recently."
Jiang Rui, a researcher at Grid Fund, also said that as of June 28, Wind data showed that the average return of private pure debt strategies since the beginning of this year was 4.75%, which was relatively strong. Since April, the bond market has been volatile, and the net value of the private bond base, which is dominated by urban investment positions, has fluctuated but the drawdown is not obvious, and if there are some convertible bonds in the position, there will be some drawdown, but it is also within a controllable range.
In terms of investment operations, Zeng Hengwei, a wealth financial planner at Paipai.com, told reporters that this year's bond private placement products performed strongly. Despite the recent turmoil in the bond market, a number of private equity firms have ensured stable performance by reducing the proportion of duration strategies and strictly controlling risks.
In the first half of the year, we allocated a balanced allocation of various bond varieties and private placements to grasp diversified market opportunities
In fact, the reporter learned that in the first half of this year, some private placement of bonds adopted the method of balanced allocation of interest rates, credit, and convertible bonds, actively grasped a variety of opportunities in the market, and achieved good returns.
"On the whole, there are still more opportunities to grasp in the market this year, including some bond fluctuation opportunities and allocation opportunities, such as interest rate bonds and REITs and other asset varieties, we are participating, and have achieved a relatively good result. The idea is to participate in as many investment varieties as possible in the market, rather than betting on any single type and not holding a belief in a single asset. Hesheng Assets said.
Zhang Shenggang, general manager of Liwei Investment, told reporters that this year, the product strategy selection is more balanced, and there are deep cultivation and layout in interest rate bonds, credit bonds, and state-owned enterprise dividend convertible bonds, and treasury bond futures have been added to hedge. "At the beginning of the year, under the expectation of asset shortage, the duration was moderately increased, and long-term bonds were preferred, and the bond market also ushered in a wave of bull market as scheduled; In the industry, industrial bonds such as urban investment and coal, as well as dividend convertible bonds of state-owned enterprises, have been allocated, and have achieved rich returns this year. ”
Silver Leaf Investment also said that the company's products mainly adopt a dumbbell-shaped trading strategy, maintain a reasonable duration and leverage level, benefit from the overall downward trend of yield, and on the basis of stable coupon income contribution, the capital gains income of assets has also made a significant contribution.
Private equity is cautiously optimistic about the bond market in the second half of the year
Beware of the risk of consensus expectations
China Fund News reporter Jiang You
Risk appetite is not high, and under the extreme "asset shortage", funds are looking for low-risk and stable investment varieties, and the yield of the bond market has reached a historical low. How will the bond market investment go in the second half of the year and what are the investment opportunities, China Fund News interviewed a number of well-known bond private equity institutions and third-party research and sales institutions.
The interviewed private equity institutions said that the current bond yield is at a historical low, and the second half of the year will remain moderately cautious, and the interest rate trend may be low before and then high. Some private equity service providers also said that private equity institutions are cautiously optimistic about the bond market in the second half of the year.
Be cautiously optimistic about the bond market and match the duration of your portfolio
In the first half of this year, the "asset shortage" continued, the bond market was sought after by funds, and the yield also reached a historical low. Some private equity expressed a cautious attitude, while others believed that private equity as a whole was still optimistic.
Silver Leaf Investment has made an analysis of the decline in yields. Silver Leaf Investment said that it is difficult for the spontaneous financing demand of the economy to recover significantly under the high-quality development model, which is the fundamental reason for suppressing the rise in bond yields. In addition, the decline in the investment risk appetite of the whole society, coupled with the rapid expansion of the scale of broad asset management driven by the "ban on manual interest payment" incident in the first half of the year, pushed the yield to continue to decline under the pressure of allocation. Silver Leaf Investment believes that bond yields are expected to remain low in the second half of the year, and the interest rate trend may be low and high around the progress of the issuance of treasury bonds and special bonds, as well as the fluctuation of the pace of the central bank's RRR and interest rate cuts.
Zhang Shenggang, general manager of Liwei Investment, said bluntly that in the first half of the year, under the extreme asset shortage market, the yield was at a historical low, and the central bank has recently warned that the interest rate is too low, so it will remain appropriately cautious in the second half of the year, continue to pay attention to the impact of subsequent policy adjustments on the economy, and maintain a balance between returns and risks. Hesheng Assets said that it does not predict the market, because the market is difficult to predict.
However, from the perspective of many three parties, private equity is still optimistic about the bond market in the second half of the year. Researchers from Haomai Fund said that most private bond placements are optimistic about the bond market trend in the second half of the year, and the current bond market risk is relatively controllable, and bond yields are unlikely to rise sharply. Zeng Hengwei, a wealth financial planner at Paipai.com, also said that private equity institutions are cautiously optimistic about the bond market in the second half of the year. Although the bond market is crowded during the interest rate cut cycle and there is a short-term adjustment risk, it is expected that the room for adjustment is limited, and the bond market as a whole is still in a bull market channel.
In terms of asset allocation, Zeng Hengwei said that in terms of investment strategy, private equity institutions may continue to control duration to reduce interest rate risk, and pay attention to convertible bonds and deliverable bond products. Researchers from Haomai Fund believe that the obvious change in private equity in bond investment is to go out of the field of urban investment bonds and increase bond investment varieties, such as interest rate bonds, industrial bonds, bank two permanent bonds, convertible bonds, deliverable bonds, overseas bonds, etc.
With due caution, private portfolios also have some control over duration. Zhang Shenggang said that at present, he has actively reduced the duration of the portfolio. In addition to the allocation of urban bidding, some science and technology innovation bonds and industrial bonds, as well as some defensive convertible bonds and REITs, will be added. Silver Leaf Investment also said that the portfolio is currently mainly allocated to short- and medium-duration high-grade industrial bonds, bank Tier 2 capital bonds and perpetual bonds as the bottom position to obtain coupon income, and balance the portfolio duration with long-term interest rate bonds. Hesheng Asset Management said that in terms of investment, it pays attention to the grasp of the timing of transactions, and has allocated various targets, such as financial bonds, interest rate bonds and industrial bonds. All the types of bonds that exist in the market are observed and covered.
Beware of the risk of consensus expectations, and there is a chance of wrong killing in some convertible bonds
Regarding the risks that the bond market may face in the second half of the year, Zhang Shenggang said that the risks faced by the bond market are mainly that after the return declines too fast, investors are easy to chase the rise and kill the fall, and even some investors will increase the duration and leverage level, and the market structure is easy to become fragile. At the same time, in the process of economic recovery, it is still difficult to eliminate credit risks. Zhang Shenggang believes that in addition to short-term urban investment bonds, new varieties such as science and technology innovation bonds are expected to have great opportunities in the market outlook.
Hesheng Asset believes that the biggest risk at present is the risk of consensus expectations. Everyone thinks that the current equity market may not be as good as the bond market, and once this consensus expectation reverses, the potential impact on the market will be relatively large.
Silver Leaf Investment said that the current risks that the bond market may face are: first, it is not excluded that the central bank will guide market expectations through open market trading of treasury bonds, and the interest rate center will be repriced; Second, the current yield has fallen to a historical low, and the coupon income is difficult to cover the cost of the debt side, so institutions are forced to extend the duration, the long-term strategy is too concentrated, and the ability to resist market fluctuations is reduced. Silver Leaf Investment believes that the fluctuation of long-term interest rates in the second half of the year may increase, and the short-end assets are relatively more cost-effective.
Among the specific types of bonds, the continued decline in the yield of urban investment bonds is mainly the result of the pursuit of funds. Hesheng Assets said that the urban investment bonds were caused by the process of debt conversion and the consensus of everyone's expectations for urban investment bonds. Because once a consensus is formed, the more people will buy, the lower the yield will naturally be. Silver Leaf Investment also said that the logic of "asset shortage" under the shortage of assets dominates the bond market, resulting in the spread of various "coupon" assets, including urban investment bonds, being compressed to a historically low percentile. Zhang Shenggang also believes that the main reason is that there is a serious imbalance between supply and demand. At present, the main change in urban investment bonds is the extension of duration, and both supply and demand are pursuing long-term.
For the convertible bonds that have recently fallen below par value in a large area, Zhang Shenggang said that convertible bonds have fallen below par value in a large area, mainly because the quality is poor, because investors are facing the risk of issuer delisting, breaking the experience of low risk of convertible bonds in the past. Convertible bonds with dividends of high-quality state-owned enterprises still have high investment value.
Jiang Rui, a researcher at Grid Fund, also said that the opportunity brought by the recent rapid decline of low-price convertible bonds should be the next depression in the bond market, and bond products with different risk-return characteristics will find suitable investment targets in the convertible bond market in the future, such as the main battlefield of high-yield bond products may be in the slightly flawed low-cost convertible bonds, and the main battlefield of pure bond products may be in the high-YTM (annualized yield) convertible bonds that have been mistakenly killed.
Editor: Xiao Mo
Review: Muyu