China Galaxy Fixed Income: "Fixed Income +" scale increased by more than 90% year-on-year, high volatility secondary bond funds significantly expanded.

The China Galaxy Fixed Income Research Report pointed out that by 2025, the "fixed income +" fund will see rapid expansion in scale, optimization of risk-return profile, and relatively stable asset allocation structure. 1) Scale: The total stock of broad "fixed income +" reached 1.79 trillion yuan, an increase of 90.1% year-on-year, with secondary bond funds increasing by 136% to 1.42 trillion yuan; 12.16 billion new shares were issued, mainly contributed by secondary bond funds. 2) Performance: The year-to-date cumulative return increased by 1.1 percentage points to 6.4%, with convertible bond funds leading with a 23.3% return rate, highest in the third quarter; the maximum drawdown within the year was -2.7%, with significant market volatility in the fourth quarter resulting in a -1.7% drawdown. 3) Asset allocation: The central position in the stock and bond allocation remains at 80%/15%, with a 1.5 percentage point increase in stock allocation compared to last quarter; in bond allocation, an increase of 2 percentage points in government bonds and 10 percentage points in financial bonds, while a decrease of 7 percentage points in convertible bonds and 3 percentage points in corporate bonds. In the fourth quarter, the "fixed income +" fund continued to grow in scale, with performance falling and cautious and proactive operations. 1) Scale continued to grow. The overall scale increased to 1.79 trillion, with secondary bond funds as the core of growth, while convertible bond funds saw a 4.2% decrease in scale to 581 billion. 2) Risk-return profile weakened across the board. The return rate fell by 3.4 percentage points to 0.4% on a quarterly basis, while the maximum drawdown increased by 0.5 percentage points to -1.7%; the risk-return ratio and stability weakened. 3) Pure bond operations were cautious and proactive. Duration shrank to 2.9 years; leverage and concentration of holdings differentiated, with "fixed income +" funds increasing leverage and concentration slightly, while convertible bond funds decreased leverage and concentration.