At the beginning of the new year, Big A fell five times in a row, which was simply bottomless, making people speechless and angry.
Yesterday, the copper bull in front of the Shanghai Stock Exchange didn't know who smashed it, and the cow's face fell into a pit.
If Teacher Fan Wei **, it is estimated that he will also say: Heaven, earth, which angel sister is this evil breath for me!
The bond market is short
Compared with the big A, the bond market is still very comfortable. In 2023, there are 345 medium- and long-term pure bonds** with returns exceeding 5%.
After New Year's Day, the debt bull ** is still continuing. Yesterday, the yield to maturity of the 10-year Treasury active bond fell below 25% (the yield ** corresponds to the bond ***, that is, the bond bull), the lowest is 24830%, 2. from the all-time low of late April 202046% is only one step away, and it is completely a posture of forcing the air.
To sum up, there are the following reasons why the bond market is "singing all the way":
In the past three years, the seesaw effect of stocks and bonds has been obvious.
The equity market has been losing money one after another, and positive returns are simply extravagant. However, the funds of social security**, insurance companies, rural commercial banks and other institutions are all to be earned, and bonds have become the main allocation direction of these institutions, which in turn will boost the bond market**.
Moreover, under the pressure of steady growth, the capital side of the market is loose, and there is an expectation of interest rate cuts and RRR cuts recently. Although Big A is indifferent to these good news, the bond market is making a lot of money, and some trading funds have even "rushed" in advance, and the recent rapid development of the bond market is a reflection of the expectation of interest rate cuts.
In addition, in recent years, market interest rates have been decreasing, such as consumer loan interest rates, housing loan interest rates, and bank loan interest rates to real enterprises, which can also be felt by everyone. The decline in market interest rates often leads to a downward trend in policy interest rates, such as the MLF interest rate will be cut twice in 2023.
This environment of falling interest rates is beneficial to the bond market.
How far can the debt cow go in 2024?
Let's talk about a question that many people are concerned about: Is buying a bond base now considered chasing high? Will the bond market continue its bull market in 2024?
In the short term, the 10-year Treasury yield is approaching the low point of late April 2020, which also means that the position of the bond market is already relatively high, and the risk is indeed not small. If the expectation of interest rate cuts and RRR cuts is disappointed, it may accelerate the adjustment of the bond market.
Whether we can still buy the bond base now, we analyze it from the following dimensions:
Dimension 1:Coupon income. The advantage of bonds is stability, no matter how it fluctuates, the annual coupon income will not decrease.
Dimension 2:And even if the bond market appears, the magnitude will not be too large. The current MLF rate is 25%, the yield to maturity of the 10-year Treasury bond is at 249% around. Generally speaking, the yield to maturity of the 10-year Treasury bond, which is the market rate, does not deviate too much from the policy rate (MLF rate).
The yield on the 10-year Treasury bond reached 2At 46%, the MLF rate is still at 295%, the difference between the two is relatively large, which is also an important reason why the bond market turned bearish at that time, and the situation is much better now.
Dimension 3:In the long run, the general trend of downward interest rates has not changed, and there are even more extreme views that we will move towards zero interest rates sooner or later.
In 2024, in the context of steady growth, the capital side will most likely continue to remain loose; After the second quarter, the Federal Reserve will enter a cycle of interest rate cuts, and the constraints on China's monetary policy will also be reduced; These are positive factors for the bond market.
Dimension 4:From the perspective of bond market funds, the allocation plate usually plays the role of a "stabilizer", and the funds of social security**, insurance companies, city commercial banks and other institutions are the main allocation plates of the bond market.
The insurance company's premium funds are huge, and among the insurance investmentable assets, the signal of the recovery of the equity market is not clear, there are fewer and fewer high-quality non-standard assets, and the interest rate on bank deposits continues to decrease, and bonds may still be their main assets in 2024.
Small and medium-sized banks, such as rural commercial banks, may be more dependent on the gradual improvement of the economy, and may also give higher budgets and weights to bond investment when loan allocation is limited and there are relatively few investment varieties on the asset side.
Based on the above dimensions, the bond market should not be too bad in 2024.
How to choose between different types of bonds**?
Most of the investors with a stable style are mainly allocated to bonds**, with little volatility, and they don't need to care too much about the changes in the bond market.
Specifically,Medium- and long-term pure debt** yields are better. Taking the strict selection of each lesson as an example, Oriental Tianyi's income in 2023 will reach 642%, Bank of Communications Yulon Pure Bond A 2023 income of 568%, this level of income is difficult to achieve for bank deposits and the vast majority of bank wealth management.
Short-term debt**, the risk is lower than that of medium- and long-term pure debt**When the bond market is weak, short-term bonds** perform relatively better. There is also a short-term bond ** in each lesson carefully selected** - Caitong Anrui Short-term Bond A, with a 2023 income of 385%, which is not bad.
In addition, there are also some bond ETFs** in the market**, which are invested in different bond types.
For example, in an urban investment bond ETF, the underlying asset is urban investment bonds, with a return of 525%, very attractive; The government bond ETF and the 10-year treasury bond ETF are safer, with returns of 5 in 202310% and 437%。
For those who prefer a single type of bond, a bond ETF is a good choice.
But in the end, in the context of falling interest rates, the coupon rate of bonds will also be reduced, which may affect the yield of bonds**.
In addition, in recent years, we can often hear the term "asset shortage", which mainly refers to the fact that there are fewer and fewer high-coupon bonds or high-yield non-standard assets.
Let's do it and cherish it.