Since the beginning of this year, the bond market has been unprecedentedly hot, and recently catalyzed by the central bank's interest rate cut, it has once again ushered in a sharp rise, short- and medium-term bonds have strengthened significantly, and the main contracts of treasury bond futures of multiple maturities have refreshed their highs.
Among the corresponding fund products, many bond-based yields are eye-catching and attractive, and they are naturally "out of the circle".
On the one hand, deposit interest rates continue to fall, and the expected returns of traditional deposits and wealth management products may be unsatisfactory, and investors are more likely to look at bonds with relatively low risk ratings.
On the other hand, the market risk appetite has shifted downward, and investors tend to seek stable investment channels, especially funds that invest in interest rate bonds and high-credit rated credit bonds, are regarded as relatively safer investment options.
After the rapid progress, how do you see the bond market in the second half of the year?
For the bond market, on the one hand, United States economic data and election expectations point to faster interest rate cut expectations; On the other hand, the domestic economy still faces many challenges in achieving the annual growth target, and after this interest rate cut, the market can still expect to cut interest rates during the year, and the pricing of the bond market basically reflects this expectation.
In the case of clear policy signals, the bond market sentiment will still be strong in the future, and the bond market trend may still be dominated by volatility and strength before the fundamentals show a clear reversal signal.
In terms of investment, we can still take a positive view of the bond allocation opportunities in the future.
Why have bond ETFs become the darlings of funds?
In addition to actively managed bond bases, participation in bond market investment through indexation is also increasingly recognized by the market.
Among them, bond ETFs have outstanding tool attributes, and have become an important tool for investors to invest in the bond market by virtue of their advantages such as convenient trading, low fees, and transparent positions.
Especially under the requirements of the new capital regulations, the advantages of high transparency and easy penetration of bond ETFs have been further highlighted.
As of the end of June 2024, the overall scale of bond ETFs has exceeded the 100 billion mark! However, compared with developed markets such as the United States, the proportion of domestic bond ETFs in ETFs is still low. In the future, as the advantages of varieties are gradually recognized and accepted by the market, domestic bond ETFs will usher in a broad space for development.
Seize the opportunities in the bond market and pay attention to the benchmark Treasury bond ETF
Xiaoxiajia's benchmark treasury bond ETF (511100) mainly tracks the Shanghai Stock Exchange benchmark market-making treasury bond index, selects all treasury bonds within the list of benchmark market-making varieties of the Shanghai Stock Exchange as constituent bonds, and specifically selects about two of the latest listed bonds from the treasury bonds with maturities of 1 year, 2 years, 3 years, 5 years, 10 years, 20 years, 30 years, etc., and the current number of constituent bonds is 16, which is regularly adjusted once a month, which is a medium-term treasury bond index that is biased towards comprehensiveness.
Source: Wind, Shanghai Stock Exchange, as of July 19, 2024, the above bonds do not constitute investment advice
The benchmark treasury bond ETF (511100) has been actively traded since its listing on December 25, 2023, with an average daily turnover of over 1.8 billion yuan! (Source: WIND, SSE, as of July 19, 2024)
What are the highlights of the benchmark Treasury ETF compared to other assets?
Compared with equity products, the benchmark treasury bond ETF (511100) only participates in bond market investment, and has a lower volatility risk.
Compared with credit bond products, the benchmark treasury bond ETF (511100) focuses on treasury bonds at the bottom, which has obvious credit safety.
Compared with other existing treasury bond ETFs in the market, most of them have fixed duration, focusing on medium-term, long-term and ultra-long-term, the benchmark treasury bond ETF (511100) has a comprehensive duration, regularly adjusts positions every month, and swaps new and old bonds, which can help investors avoid the cumbersome operation of self-selection and exchange.
Compared with the OTC bond index, the benchmark treasury bond ETF (511100) also has the characteristics of high T+0 subscription and redemption efficiency, more convenient trading, transparent position information, and has been included in the scope of use of securities lending funds and exchange pledged bonds, and has low transaction costs.
In addition, in the context of the "Measures for the Management of Bank Capital" to clarify the requirements for the risk weight measurement of the penetration of the assets invested by banks, the benchmark treasury bond ETF (511100) has clear underlying assets and clear investable assets, which occupies a clear advantage in the authorized measurement method, and is a good choice to meet the requirements of the new bank capital regulations.
In the context of medium and long-term interest rates in a downward channel, the benchmark treasury bond ETF (511100) may be a good choice to invest in a basket of treasury bonds, capture the downward opportunities of long-term and short-term interest rates in a balanced manner, and diversify the term risk caused by liquidity, fundamentals and other factors.
Source: Wind, CITIC Securities, Risk Level: R2.
The base date of the Shanghai Market-making Treasury Bond Index is 2022-06-30, and the 2023 annual yield is 3.51%.
The Fund is a bond ETF and the underlying index does not fully represent the entire interest rate bond market, and there is a risk that the average rate of return of the underlying index constituent bonds may deviate from the average rate of return of the entire interest rate bond market; the risk of fluctuations in the underlying index due to macro market factors; the risk that the return of the fund's portfolio deviates from the return of the underlying index due to changes in the compilation of the underlying index, adjustment of the constituent bonds, liquidity problems of the constituent bonds, securities transaction costs and fund operating fees, management capabilities of the manager, sampling replication and other factors; the risk that the index compiler will cease to provide services; the risk of changes in the underlying index; the risk of suspension of trading of constituent notes; risks of third-party services; managing risk and operational risk; the risks of investing in Treasury futures; policy risk; As an ETF product, the Fund is traded on the exchange, and the unique risks that may exist include: the risk of discount and premium of the trading price of the fund shares in the secondary market; the risk of errors in the subscription and redemption list; delisting risk; the risk of failure of investors' subscriptions; the risk of failure of investor redemption; agency trading risk of subscription and redemption; the risk of reference IOPV decisions and IOPV calculation errors; The risk of realising the redemption consideration of the exchange fund shares. For the specific risk warning of the Fund, please refer to the Fund's Prospectus and other legal documents for details. Index performance does not represent product performance, and secondary market price performance does not represent net value performance. This material is not intended as any legal document, the views are for reference only, all information or opinions expressed in the material do not constitute investment, legal, accounting or tax advice, and our company does not make any guarantee for the final action advice on the content of the material. Under no circumstances shall the Company be liable to any person for any loss arising from the use of any content in this material. The market is risky, and you need to be cautious when entering the market.