Expectations of a rebound in the stock market have risen sharplyHitboxarcadeUnder the background ofHitboxarcadeThe "move" of Ki-min is having a butterfly effect.

A reporter from the Securities Times noted that on May 18, four partial debt funds issued a winding-up risk notice at the same time, due to a sharp decline in the size of the fund. At the same time, a partial debt fund facing liquidation is favored by investors because of the substantial increase in its positions in stocks to become an equity fund.

Obviously, with the continuous recovery of confidence in the stock market, investors' risk preference has quickly switched from defense to attack, and highly flexible public equity funds have attracted the influx of funds from many people who prefer low risk because of the rapid "blood recovery" of their products.

Outflow of funds from partial debt funds

Multiple products prompt the risk at the same time

On May 18, a number of partial debt funds issued a rare risk reminder of fund winding up at the same time, due to a sharp decline in the size of the fund.

If the net asset value of the fund continues to be less than 50 million yuan as of May 30, 2024, the net asset value of the fund has been less than 50 million yuan for 50 consecutive working days, according to a notice issued by a public offering fund in Shenzhen. If the above situation occurs, from May 31, 2024, the fund will enter the fund property liquidation procedure, and there is no need to convene a general meeting of fund share holders for deliberation. After the fund enters the liquidation procedure, it will stop handling the business of applying for purchase, redemption and so on. If the above-mentioned fund contract is terminated, the fund manager will set up a fund property liquidation group in accordance with relevant laws and regulations and fund contracts to perform the fund property liquidation procedures.

The partial debt products of a public offering in Beijing also announced that the fund may trigger the termination of the fund contract. According to the agreement of the Fund contract, if the number of fund share holders is less than 200 or the net asset value of the fund is less than 50 million yuan for 20 consecutive working days, the fund manager shall disclose it in the periodic report. If the above-mentioned situation occurs for 50 consecutive working days, the Fund will enter the liquidation procedure and terminate in accordance with the provisions of the Fund contract, and there is no need to convene a general meeting of fund share holders for review. As of May 17, 2024, the net asset value of the fund has been less than 50 million yuan for 30 consecutive working days.

Another large public offering in southern China also suggested the risk of liquidation of its partial debt funds. the public offering announced on May 18 that the net asset value of the relevant partial debt funds had been less than 100 million yuan for 30 consecutive working days, which may trigger the termination of the fund contract. The first quarterly report of 2024 previously disclosed by the fund showed that by the end of March 2024, the net asset value of the product was only about 70 million yuan.

In addition, another head joint venture fund company also issued a risk warning for the liquidation of one of its partial debt funds on May 18, announcing that as of May 16, 2024, the partial debt fund has had a net asset value of less than 50 million yuan for 45 consecutive working days. If the net asset value of the fund is less than 50 million yuan for 50 consecutive working days as of May 23, 2024, the fund will enter the liquidation procedure in accordance with the fund contract.

A reporter from the Securities Times noted that the change in the holding strategy of institutional holders is an important reason for the sharp reduction in the size of relevant partial debt funds and even forced to issue winding-up tips. According to the information announced in the Fund's Quarterly report, almost all of the four partial debt fund products that issued liquidation risk tips exist that the proportion of fund shares held by institutional investors is close to or reaches 20%. Take one of the funds as an example, an institutional investor redeemed all 50 million funds held in March this year. After this redemption, as of the end of March, another institutional investor held a share of 38 million funds accounting for 89%.Hitboxarcade.13%. It also suggests that the fund's liquidation notice on May 18 is likely to be due to the fact that the institutional investors who hold 38 million funds have also begun to redeem.

The stock market is heating up rapidly.

Under the effect of making money, the money began to "move".

Behind the fact that the above-mentioned partial debt funds are constantly being redeemed, the base people have "moved" because of the improvement of the stock market.

In fact, the above issued winding-up tips of partial debt fund products, in the performance ranking of similar funds is not poor, or even relatively excellent. However, due to the low position of these partial debt funds, the flexibility is relatively small, and the increase is naturally small in the context of the warming stock market. As a result, slightly more aggressive investors naturally don't like it, and it's hard for these funds to keep money.

Take a partial debt fund owned by a public offering in Shenzhen as an example, the product has made a positive gain of about 4% so far this year, and it has lost only 0% in the context of sharp market fluctuations in 2023.Hitboxarcade.44%. Although the product slightly increased its stock position by 4 percentage points during the first quarter of 2024, the total stock position still accounts for less than 20% of fund assets. As a result, the fund's cumulative net worth has risen by just 3.47 per cent in the last three months against the backdrop of a recent stock market rally and increased risk appetite.

Similarly, another Northern Public offering partial debt fund, which issued a liquidation risk warning, is also a relatively stable product with a net worth. The fund has been steady since its inception in June 2022, earning a positive return of about 2 per cent even in a weak market environment in 2023. However, when the stock market environment changes, making the conservative strategy less and less attractive than the offensive strategy, the sudden "technical bull market" makes the low position strategy of the fund product difficult to attract holders.

According to the first quarterly report of 2024 disclosed by the above-mentioned products, as of the end of March, the stock position of the partial debt fund was only about 2%, scattered in 10 stocks, and the low stock position caused the fund's net worth to rise by only 0.87% in the most recent month. Although running slowly, the steady strategy has enabled the partial debt fund to make a return of about 3% so far this year.

Obviously, a number of partial debt funds that have achieved a positive return of 3% muri 4% this year issued a liquidation risk reminder, largely because of the "technical bull market" atmosphere in the stock market, which made some partial debt fund holders envy equity funds with greater gains, thus causing these partial debt funds to be no longer popular. So far this year, the performance of the funds with the highest returns in the market so far this year has exceeded 30 per cent, and even index funds have reached the highest returns of 25 per cent, according to Wind.

To avoid winding up

Partial debt funds increase their positions and change into stock bases

According to the above logic, the whereabouts of the "move" of the base people's funds obviously points to the stock funds.

For example, a partial debt fund has changed from "coming back from the dead" to "lively" in just three months this year, which largely explains why as many as four partial debt products a day have issued liquidation risk alerts and answered what is the product strategy to avoid liquidation.

A reporter from the Securities Times noted that a partial debt fund under a large public offering in South China had entered a state of quasi-liquidation in early January this year, and the fund assets were only 12 million yuan as of early January 2024. The partial debt fund said in the periodic report: "the fund has a net asset value of less than 50 million yuan for 60 consecutive working days, and fund managers are discussing and demonstrating feasible solutions."

Finally, the "solution" to the continued shrinking of the above-mentioned products and avoiding liquidation is to convert debt into equity. In terms of specific operation, the stock position of the above partial debt fund soared from 0.27% at the beginning of January this year to 87.33% at the end of March this year. Such a high stock position actually means that the product style and risk-return characteristics of this partial debt fund have changed greatly. Has become an equity fund. The above operational changes not only make the fund products avoid the fate of liquidation, but also because the rising heat of the stock market has led to a rebound in fund performance, and the scale of fund products has increased rapidly. By the end of March 2024, the partial debt fund, which once faced liquidation this week, has increased significantly from 12 million yuan at the beginning of the year to 198 million yuan after it was transformed into an equity fund, and the asset size has increased by 15 times in three months.

"the fund has performed well, on the one hand, because it has increased the allocation of equity assets, and on the other hand, because the grasp of the structure relatively matches the current market. Prior to this, the fund's allocation of A shares has been at a low level, but in the first quarter, the fund increased the allocation of equity assets. " The fund manager who manages the above products said that the A-shares in early February this year already have very high allocation value, and the market has ushered in the bottom of the valuation. Objective indicators such as price-to-earnings ratio, equity-debt premium ratio, dividend yield and other objective indicators show that the market is at the bottom of history, and there are rich structural opportunities in 2024, both at home and abroad.

Stock and debt seesaw effect appears

There is still some pressure in the bond market.

In addition, the recent weak bond market pattern is another trigger for the outflow of many partial debt funds.

In this regard, Wu Bingyan, fund manager of the Great Wall, believes that on May 10, the Ministry of Finance issued a "notice on convening a mobilization and deployment meeting for the issuance of ultra-long-term special treasury bonds." the bond market ushered in an adjustment, of which 10-year and 30-year treasury bonds were adjusted to 2.40% and 2.6075%, respectively. On May 13, the Ministry of Finance issued the notice on announcing the relevant arrangements for the issuance of general treasury bonds and ultra-long-term special treasury bonds in 2024, giving a plan for the issuance of ultra-long-term special treasury bonds, from late May to November, once a month for 20 years, twice a month for 30 years, and every two months for 50 years, with a net supply of about 200 billion yuan per month. Since the beginning of this year, the main line of the bond market is the game of supply pressure and allocation of power, so the market pays close attention to the issue of special treasury bonds. The landing of the special treasury bond issuance plan, the relatively slow pace has little impact on the bond market, so the bearish has been alleviated.

With regard to the recent weak pattern of bonds, a fund manager of Yi Fangda Fund believes that the main reason is that the odds of bond yields have declined after the rapid decline after the end of March. And with the confirmation of the issuance of trillion yuan of ultra-long-term special treasury bonds, slightly increased pressure on exchange rate depreciation, improved fundamentals and other factors, the volatility of the bond market has obviously increased, and gradually turned into a shock pattern.

A bond fund manager in Shanghai also believes that the relaxation of the real estate policy will cause a certain periodic disturbance to the bond market, but it will not constitute a substantial negative. Considering that the effect of the real estate policy remains to be verified, the general environment is still favorable to the bond market. However, with the acceleration of government bond issuance, there will be a certain run on the amount of bonds allocated on the bank balance sheet, and the growth rate of infrastructure investment in the superimposed city will accelerate, which will increase the market risk preference in stages. Put pressure on the bond market.

Wei Fengchun, chief economist of Chuangjin Hexin Fund, said that the Fed's policy has in fact restricted domestic interest rate cuts. The idling of funds further weakens liquidity, and it is a fact that the supply of bonds increased in the second quarter, so it is a basic judgment that bond trading continues to be suppressed. Because of the suppression of liquidity, bond trading is only affected by the rhythm. Based on the economic repair brought about by the full liberalization of real estate purchase restrictions, there is no sufficient evidence to be completely bearish on bonds.