The bond market has recently exhibited a noteworthy phenomenon often described as "bear short, bull long." This pattern has become particularly evident in the issuance of new public bond funds, many of which have concluded their fundraising rounds ahead of scheduleThe impetus behind this trend is not complicated; bond funds are recognized for their robust performance, frequently exceeding investor expectations.

As the year progresses, the bond market has witnessed a significant upturn, resulting in impressive yields across various bond fund productsCurrently, more than 90% of bond funds in the market have reported positive returnsWhile the stock market, specifically A-shares, has picked up steam since the National Day holiday, the prolonged downward trend leading up to this point has made it challenging for equity funds, even those managed by top-tier fund managers, to compete with the lucrative bond funds

For instance, a smaller public fund managing a 30-year treasury ETF has surged from less than 300 million yuan in late September 2023 to an astonishing 4.2 billion yuan by the end of the same month, boasting a return exceeding 20% for the year—a remarkable sixteen-fold increase within just one yearAnother small public fund's mini-bond fund started with an asset base of just 10 million yuan but, thanks to impressive returns close to 16% this year, surged past 10 billion yuan in assets, marking a staggering hundred-fold growth.

Recent data reveals that total bond fund assets have surged by over 150 billion yuan in just the last month of November, inching close to a remarkable 6 trillion yuan in total sizeThis growth is particularly notable considering the entire public fund industry encompasses around 32 trillion yuanThe bond fund issuance market is experiencing unprecedented excitement, with both major and smaller funds concluding their fundraising phases early

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Apart from institutional investors eager to capitalize on bond funds before the year's end, the robust experience historically afforded to bondholders also significantly influences this trend, encouraging early closings for several bond funds.

It is essential to remember that the bond market's yield patterns have not been unidirectional this year; fluctuations have occurredNotable adjustments were recorded in April and October, dramatically impacting public bond funds and bank wealth management products, leading to liquidity challenges for some managers as investors with low risk tolerance pulled their moneyDespite these setbacks, the overarching narrative for this year's bond market remains bullishMany investors who held their positions through volatility have reaped the rewards of a substantial overall increase, bolstered further by rapid rebounds that create positive sentiment and strengthen future resolve to weather similar fluctuations.

For fund managers, while equity funds can yield higher management fees and generate significant profits for fund companies, they can also be precarious during periods of volatility

Consequently, the bond fund has emerged as a powerful lever for fund companies looking to enhance their standings in a competitive landscapeWithout a strong bond fund portfolio, companies seeking to categorize themselves as medium to large public funds face considerable challengesGiven the recent sluggish approval rates for new bond fund applications and restrictions on investment scope, maximizing existing bond fund resources and achieving strong performance with current offerings have become top priorities for many fund companies.

Interestingly, while mini-equity funds usually present a challenge for many managers, mini-bond funds have transformed into hidden gemsDespite their smaller sizes, there has been a substantial demand for these products recently, leading even the smallest fund companies to experience surges in interest and performance.

As various public funds attempt to capitalize on the blossoming bond market, many investors, especially those engaging through online platforms, have begun to reevaluate their understanding of bond funds

It has become apparent that bond funds can be categorized into several types, such as primary bond funds including convertible bonds, secondary bond funds inclusive of stocks, strict interest rate bond funds purchasing solely government or government-backed securities, credit bond funds taking on credit types, along with different maturity-focused index funds and bond ETFsThe distinctions among these categories are significant, hinting at diverse investment strategies that appeal to a range of investor preferencesThe foundational principle of bond funding remains simple: as long as there are no major defaults, earning potential exists, entirely separating the bond market experience from that of equities, which despite their greater upside potential, also pose significant downward risks.

As China continues its path toward high-quality economic development and reforms, investors increasingly contemplate sustainable growth of their assets