China Galaxy Securities: Bond fund size significantly declined.

The research report from Galaxy Securities in China pointed out that in Q3, the scale of bond funds showed a significant convergence, with a decrease in the proportion of interest-bearing bonds and an increase in credit bonds. As of Q3, the total scale of public funds in the market was 35.4 trillion yuan, of which the scale of bond funds decreased by 2.56% compared to the previous period, amounting to 10.56 trillion yuan. The combined scale of the three types of pure bond funds fell by 0.75 trillion yuan, with a decrease in bond positions of 0.7-2.3 percentage points quarter-on-quarter, with financial bonds as the main asset allocation. In terms of bond scale, the short-term pure bond fund showed the largest decrease proportion, with a decrease of 0.2 trillion yuan to 0.95 trillion yuan quarter-on-quarter, mainly due to the bearish bond market and the impact of new regulations on bond fund fees. In terms of bond positions, various types of pure bond funds decreased by 0.7-2.3 percentage points to 95-97%. In terms of asset allocation, most bond varieties are concentrated in financial bonds, medium-term notes, and corporate bonds, with financial bonds being the majority.