From the perspective of capital, the central banks main intention is to maintain stability, especially in the first four months, the cost of inter-bank repo capital fluctuated narrowly, and the cost of capital fell to a historical low. However, in May, the central banks operation frequency slowed down, the strength of government bond issuance increased, and the cost of capital rebounded from a low level. There is a risk of subsequent volatility in the market capital. The bond market yield performance exceeded expectations in the first four months under the support of fundamentals and funds, but fundamentals began to recover. After the tightening of funds, the bond market yield shows a typical bear flat feature, with the short end of the yield curve rising more than the long end.
From the perspective of import and export performance, the growth rate of import and export declined seriously in the first three months due to the heavy impact of global economic activities and the rapid reduction of orders. However, from the export data in April, the demand for foreign goods (especially for epidemic prevention related materials) was relatively strong during the epidemic period, and the impact of the epidemic on foreign countries was mainly in the second quarter. It remains to be seen whether the subsequent rebound of foreign demand can continue.
From the perspective of monetary policy, the central banks monetary policy has been in a state of continuous easing in the first three or four months. In February, the central bank reduced the open market operating interest rate, and in March, the reverse repo rate continued to be lowered, maintaining the absolute abundance of inter-bank liquidity. In January and March, there were two reductions in the standard, and a large amount of liquidity was released, which is conducive to the easing of the capital. After the central bank sharply reduced the frequency of open market operations in May, the cost of funds began to rise, and the expectation of loose funds began to decline.
From the perspective of bond market performance, the first four months were more than expected bond bull market, and in May, the situation began to reverse. The performance of bond market in these four months was divided into four stages: from January to February 10, the bond market was in a relatively gentle downward stage, which was the impact stage of domestic epidemic collection, and the cost of capital decreased compared with the previous stage. The second stage is from February 11 to March 9. The domestic epidemic was gradually controlled, but the spread of foreign epidemic accelerated, and the bond market yield further declined. The third stage is the oscillating market. From March 10 to the end of April, the cost of capital continues to decline. External liquidity has a short-term impact on the bond market. After the impact, the bond yield continues to decline. In the fourth stage, the situation reversed in May, and the downward range of capital cost narrowed significantly. At the end of May, the capital cost rose to above 2.2 level in stages, and the markets expectation of continuous easing of capital began to change.
Since the adjustment in May, the short and medium-term yields have risen rapidly. Xu Yanfang believes that the growth rate of domestic economy will continue to rise from the bottom in the second half of the year, and the peripheral economy will start to rebound from the bottom. The support of the bond market will be weakened basically. From the perspective of policy, due to the urgent demand for economic stability and rising back, the financial policy will be further strengthened, and the capital is expected to be in a stable state, but with With the progress of economic recovery, the cost of capital has the risk of rebounding.
The bond market volatility has increased risk, so we should control the risk strategically. In terms of portfolio strategy, Xu Yanfang believes that we need to grasp the risk of interest rate volatility and control the liquidity risk and net value volatility risk of the portfolio in the case of increased risk. Because the overall yield level of various varieties is at a historical low level, the downside space is limited, but the upside space risk is increased, so the strategy It needs to be flexible, and the strategy of credit bonds needs to be supported by the coupon of bonds. Although the yield level of credit bonds is at a historical low level, the support of coupon is valuable, and it is expected that the follow-up capital cost still has downward momentum and space. In terms of credit risk, due to the need to prevent credit risk in the economic downturn stage, the portfolio should avoid the low rated individual bonds and maintain the liquidity strategy of the medium and high rated individual bonds.
The strategy of medium and short-term bond products is more flexible than that of baby products such as monetary fund. When the market fluctuates, there is the risk of net value fluctuation. However, due to the unexpected changes in the market, there is room for the downward trend of bond market yield and the upward trend of net value.
Treasury bonds usher in value buying point
Xu Yanfang said that from the point of time, it has entered the value buying point. From the perspective of yield level, the three-year and five-year period adjustment range is more than 70 basis points, which is mainly due to the result of the central banks fund policy shift and capital cost rise. The seven-day repo has a very large upward range from the low point of 1.4 in the early stage to more than 2.2 at the end of May, but the high capital cost will increase the issuance rate of bonds This is contrary to the goal of reducing the financing cost of enterprises. There is still a downward trend in the cost of follow-up capital. But it is difficult to draw further apart to the absolute low level. After all, the fundamentals have begun to climb, and the risk of bubble will be too loose after the capital side is too loose. Therefore, the central bank will tend to drip irrigation accurately in the direction of monetary policy.
How investors choose Bond Fund
Xu Yanfang said that first of all, it depends on the personal risk preference of investors. Monetary funds are low-risk products, and investors are unlikely to lose money, but the expected return is relatively limited. Short term bond funds and medium and short term bond funds are low and medium risk products, and their expected returns have advantages over monetary funds. The risk point is that their net value will be affected by daily bond market fluctuations.
The other is the medium and long-term pure bond fund with higher expected return and expected risk than the short-term bond fund and the medium and short-term bond fund, with the highest investment flexibility, but in the case of market volatility, the risk is also greater than the short-term bond fund and the medium and short-term bond fund. Because of participating in equity investment, the expected return and expected risk of the secondary bond fund are higher than that of the medium and long-term pure bond fund. Investors should choose products according to their own risk preference. The opinions contained in this material are for reference only and do not constitute the prediction and guarantee of investment suggestions and future performance of the fund. The fund has risks. Before investment, please read the fund contract, prospectus and other legal documents, understand the specific situation of the fund and listen to the appropriateness opinions of the sales agency, and make investment decisions independently according to their own risk tolerance, investment period and investment objectives. Source: Ren Hui, financial editor of Netease_ NBJ9607
The opinions contained in this material are for reference only and do not constitute the prediction and guarantee of investment suggestions and future performance of the fund. The fund has risks. Before investment, please read the fund contract, prospectus and other legal documents, understand the specific situation of the fund and listen to the appropriateness opinions of the sales agency, and make investment decisions independently according to their own risk tolerance, investment period and investment objectives.