Driven by risk-aversion sentiment and investment demand, the management scale of medium and short-term debt funds has climbed again. The recently disclosed 2024 second-quarter fund report shows that the total scale of these products has exceeded 800 billion yuan, with a scale increase of over 50% in the first half of the year, ranking among the top in various fund categories.
The overall scale has exceeded 800 billion yuan
Looking at the data disclosed in the 2024 second-quarter fund report, the scale of medium and short-term debt funds has seen rapid growth.
Wind data shows that as of the end of the first half of 2024, the combined scale of 184 medium and short-term debt funds (calculated by merging different shares) in the entire market reached 800.465 billion yuan. On the basis of a scale surge of 109 billion yuan in the first quarter, the scale increased by another 179 billion yuan in the second quarter. The overall scale increased by 288 billion yuan in the first half of 2024, with a growth rate of 56.22%.
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In the overall scale leap in the first half of this year, the scale of some medium and short-term debt funds also soared.
For example, the scale of funds such as Bank of Communications Stable Profit Medium and Short-term Debt, Chuangjin Hengxin Hengxing Medium and Short-term Debt, and SWS An Tai Rui Li Medium and Short-term Debt all increased by more than 13 billion yuan in the first half of the year. The scale of ICBC Zun Yi Medium and Short-term Debt also increased by more than 11 billion yuan. These funds have currently implemented large-amount purchase restrictions, with daily purchase limits ranging from 3 million yuan to 30 million yuan.
Industry insiders say that under the background of "asset scarcity" and equity market adjustments, the advantages of medium and short-term debt funds remain obvious, and they are an important tool for investors to manage their idle money.
A public offering institution in South China said that under the background of "asset scarcity", the increase in market demand for short-term debt assets is a manifestation of investors' risk-aversion sentiment.
A director of a large public offering fixed income department also believes that in recent years, with the continuous adjustment of the equity market, investors' risk preferences have decreased. Medium and short-term debt funds integrate advantages such as low volatility, low drawdown, and high liquidity, which meet investors' stable financial management needs, hence the continuous increase in scale.
Over 40% of medium and short-term debt funds have implemented purchase restrictions.Short-term scale increases have also triggered reconfiguration pressures for medium and short-term bond funds, leading to the implementation of purchase restrictions on multiple products.
Recently, Yifangda Anyuan Medium and Short-term Bonds, CITIC Securities Medium and Short-term Bonds, and Guangfa Jingxing Medium and Short-term Bonds have issued announcements stating that in order to ensure the stable operation of the products and protect the interests of shareholders, large-scale purchase restrictions have been imposed on the products or their sub-shares, with purchase limits of 2.5 million yuan, 20 million yuan, and 100,000 yuan, respectively.
Wind data shows that as of July 20, there are 75 medium and short-term bond funds (calculated by combining different shares) in the entire market that have suspended subscriptions or suspended large-scale subscriptions, accounting for 40.76%. The product with the lowest purchase limit has a single-day large-scale subscription limit of only 1,000 yuan.
Regarding the phenomenon of intensive purchase restrictions on medium and short-term bond funds, the head of fixed income at the aforementioned large public fund said that the restrictions are mainly due to the fact that when the scale of medium and short-term bond funds grows too fast, the large amount of cash flowing in quickly will dilute the proportion of high-quality assets in the early stage and dilute the interests of the original holders. At the same time, under the background of "asset scarcity," it is difficult for newly subscribed funds to quickly match suitable assets.
The person from the aforementioned public institution in South China also said that the purchase restrictions on this type of fund are mostly to prevent a large amount of funds from flowing in quickly in a short period, diluting the returns of the original holders, and ensuring the stable operation of the fund.
The person said that compared to other funds, medium and short-term bond funds and ordinary bond funds are a practical choice for some low-risk funds as alternatives to currency and money fund enhancement products. Recently, investors' risk-avoiding sentiment is relatively strong, and the subscription volume of bond funds is also relatively large. To avoid diluting the returns of existing holders, some bond funds may actively choose to restrict purchases.
The average return rate this year is 2%
Wind data shows that as of July 19, the average return of medium and short-term bond funds in the entire market this year is 2%. Among them, Penghua Yongda Medium and Short-term Bonds 6-month fixed opening and CITIC Prudential Zhitai Medium and Short-term Bonds have achieved returns of 5.62% and 4.41%, respectively, and many medium and short-term bond products have achieved returns of more than 3% this year.
The person from the aforementioned public institution in South China believes that medium and short-term bond funds are often positioned as liquidity management tools similar to currency alternatives and currency enhancement, and their investment value needs to be comprehensively considered by balancing drawdowns, returns, and liquidity.
In terms of investment, the person further said that the investment in medium and short-term bond funds in the second half of the year still adheres to the strategy of prioritizing coupon strategy, closely monitoring the market's liquidity situation, flexibly adjusting the duration strategy, and paying attention to safety margins when grasping trading opportunities.A high-performing short-term bond fund manager in Shanghai also stated that he will maintain a medium-short duration and leverage operations in the management of short-term bond funds. By taking advantage of market fluctuations, he will flexibly adjust the duration, balancing both coupon income and capital gains.
The aforementioned director of a large public fixed-income department also believes that the current term spread between long and short ends has been compressed to a historically low level, with long-end and ultra-long-end yields also at historical extremes. Compared to the long end, the short end may have greater certainty. After policy interest rates have consecutively stepped down, the current absolute level of short-term bond rates is relatively high, thus there is room for further decline.