We all know that bond types are generally divided into three main categories:Pure debt**, primary debt base, secondary debt base。Pure debt** only invests in bonds, and the return and risk are the lowest among the three types of bonds**; The primary bond base can hit new stocks, because the market value of new stocks is required, so most of the primary bond base in the market is almost pure debt, and only a few primary debt bases are allocated.
WhileThe secondary bond base mainly invests in bonds, and can also invest a small part of it**, but *** generally does not exceed 20%, so the overall income and volatility of the secondary bond base will be greater than that of pure bonds.
The following chart is the cumulative yield trend chart of the secondary bond base, the CSI 300 Index and the China Bond Composite Wealth Index, which shows that the secondary bond base with an allocation of about 20%** far exceeds the China Bond Composite Wealth Index in terms of long-term performance trend, sacrificing some volatility but reaping higher returns.
Data**: wind, as of 2024-01-31; The historical performance of the index is not indicative of the future, the market is risky, and investors need to be cautious. The above content and views are for reference only and do not constitute any investment advice.
Even compared with the CSI 300 Index, the cumulative yield of the secondary bond base at certain points in time can outperform the CSI 300 Index, mainly because the CSI 300 Index is a pure ** index, and its volatility is relatively large. If you can't accept the volatility of the CSI 300 Index, and want to reap the return of more than pure debt relatively steadily, I personally think you can try the secondary bond base and hold it for a long time.
Recently, the market has been very hot fixed income +**, including the secondary debt base. In fact, in the current market environment, the secondary bond base is still relatively advantageous.
As far as the bond market is concernedFrom the perspective of the current macro environment, the economy continues to recover, the structure and strength remain to be seen, and the coordination of monetary and fiscal is the core focus of the bond market. In 2023, the financing demand of residents and enterprises will be generally weak, the momentum of credit growth will weaken, the momentum of real funds to enter investment and consumption will be insufficient, and the financing interest rate will need to be further lowered to cooperate with the fiscal policy, and there is a high probability that the RRR and interest rate cuts will continue in 2024, which is good for the bond market.
As far as ** is concernedWhether it is a broad-based index or a popular track in the market, valuations have fallen back to the bottom area, market sentiment has been extremely pessimistic, the risk of further sharp downside in the equity market is relatively limited, and the allocation cost performance is outstanding.
This article will give you a brief introduction to a manager of the secondary debt base who is good at quantification - Wells FargoChen Siyang
Chen Siyang graduated in financial engineering, with a bachelor's degree in financial engineering from Wuhan University and a master's degree in financial mathematics from the University of Warwick. He used to be a researcher and investment manager of Bank of Communications Schroders; He joined Wells Fargo in October 2016 and served as a quantitative investment manager, and is now a quantitative manager of Wells Fargo's Quantitative Investment Department, with 11 years of experience and nearly 6 years of investment management experience.
A few days ago, Fuguo*** hung out an analysis of Chen Siyang ("Everything can be AI!"). What can AI do for us in fixed income investment? detailed his quantitative investment strategy.
Chen Siyang said that quantification represents a research method and attitude, not confined to **, bonds or any type of assets, the instrument attributes are strong, and he uses quantitative strategies to invest in the three major types of assets in the secondary bond base**, convertible bonds, and pure bonds.
Profile**: Phu Quoc ***
For ** assets, he uses the artificial intelligence stock selection model to score the ** in the **pool, with more ** with high scores, and less with less scores, not seeking a bowl of water, but capturing the alpha of the target as much as possible when there is an opportunity.
For bond assets, he adopts a momentum trading strategy, that is, he makes ** or sell decisions according to the trend of market **.
The momentum effect of the domestic bond market is relatively strong, and once the trend of ** moving in a certain direction is established, the possibility of continuing this trend may be greater than the reversal. With the help of AI tools, Chen Siyang's momentum trading strategy can quickly read a large amount of data and capture momentum signals more accurately, so as to respond quickly and flexibly to market changes.
For convertible bond assets, considering that convertible bonds fluctuate greatly, he established a convertible bond model factor library with reference to **, scored the quality of convertible bonds, and allocated better targets from them.
At present, Chen Siyang manages a total of 3 secondary bond bases, namely Fuguo Xingli Enhancement, Fuguo Baoli Enhancement, and Fuguo Fengli Enhancement. Because it is a secondary bond base, none of the three *** have exceeded 20%, but Chen Siyang has additionally allocated convertible bonds** to enhance income, and Fuguo Xingli has the most enhanced allocation, and the performance is also the best, with a yield of 39 in the last five years11%, exceeding the performance benchmark of 3142%, 40 360 in the same category (data**: periodic report, as of 31 December 2023).
Data**: Revenue, **Performance Comparison Benchmark from Periodic Report, as of 2023-12-31; **Ranking and related data from Haitong**, as of 2023 12 31
If you want to say who can best represent Chen Siyang's style, or the enhancement of Fuguo Fengli, the benchmark of this ** performance comparison is the yield of China Bond Composite Full Price Index * 80% + the yield of China Securities 500 Index * 20%.
Chen Siyang adopts a quantitative strategy operation, ** the position industry is scattered and even, there is no particularly obvious style exposure, and the industry composition of the CSI 500 Index is close. Pure bonds** are mainly low-risk treasury bonds and bank perpetual bonds, and about 20% of convertible bonds** are held for excess.
Data**: Choice, as of June 30, 2023.
As of the end of 2023, the yield of Wells Fargo Fengli in the past 5 years is 2401%, the maximum drawdown is 541%。Over the same period, the return on the performance benchmark was 1234% and the maximum drawdown is 649%, Wells Fargo Fengli Enhancement outperformed the performance benchmark in terms of yield and drawdown (data**; Periodic report, Choice, as of December 31, 2023).
Data**: Periodic report, as of December 31, 2023.
In the quarterly report, Chen Siyang shared his views on the three markets of **, pure debt and convertible bond:
Clause. 1. The income of the equity ** dragged down by the major domestic stock index**, but thanks to the stability and continuation of the market style in the fourth quarter, the excess return is more significant, mainly from the direction of small cap, value, high dividends, etc.
Clause. Second, the interest rate of short-end bonds continued to rise due to the disturbance of funds over the New Year, and the long-end interest rate continued to fall under the impetus of allocation demand and monetary policy easing expectations, and the term interest rate spread fell. Given that long-term interest rates have fully anticipated the weakening of the economy, and the short-end has greater certainty and cost performance, the portfolio of pure debt** has maintained a shorter duration and a relatively safe credit rating allocation.
Clause. 3. The valuation level of the convertible bond market has been compressed to a certain extent in the fourth quarter, and the number of bonds with high maturity yields has increased significantly, which has the value of the left layout, and the overall portfolio of convertible bonds has increased.
I am more optimistic about the rich country, one of the "old ten" management companies in China. In recent years, it has successively won the honor of the first company of the year issued by "China ** News", "Times" and "Shanghai ** News".
Chen Siyang is also a veteran who has been deeply involved in the quantitative field for many years, good at model research and management, and has established quantitative models in the three major asset fields of **, pure debt and convertible bonds with the help of AI, and his historical performance is also very good.
Now he's going to send a new **Wells Fargo Shengli Enhanced Bond** (Class A: 020811, Class C: 020812).The new ** still uses the quantitative strategy, but the positioning risk is lower, the total amount of **convertible bonds** does not exceed 20%, and the pure debt is the bottom, **more than 80%, you can pay attention to it.
My article is basically ** combing notes, the amount of information is still relatively large, thank you for your patience to read, all content is personal research, does not constitute investment advice, please pay more attention to objective data.
Risk Disclosure:The relevant views quoted are from relevant institutions or public channels, and I do not make any guarantee for the accuracy and completeness of the views, and investors operate accordingly at their own risk. The market is risky, regular investment is risky, and investment needs to be cautious. The above content is for reference only, the article involves **, does not constitute **recommendation and investment advice, **market volatility, please operate cautiously before purchasing. China's first operation time is short, and it cannot reflect all stages of development. The Manager does not guarantee the profit and minimum returns, and the other performance of the Manager does not constitute a guarantee of the performance of the Administrator. **Past performance and its net worth are not indicative of future performance, and the full results are shown on the product details page. **The product has the risk of income fluctuation, investors should agree with the principle of "buyer's responsibility" when making ** investment decisions, and after making ** investment decisions, the investment risks and losses caused by the changes in **operating conditions and **net value shall be borne by ** investors. Investors should carefully read the "Contract", "Prospectus" and other legal documents to confirm that they know and understand the product features and related risks, and have the corresponding risk tolerance. The market is risky and investors should be cautious.