The 2025 Q4 reports of public funds have been fully disclosed, revealing an increasingly prominent and seemingly contradictory phenomenon: against the backdrop of the overall continuous expansion of "fixed income plus" funds, the scale of convertible bond funds, a crucial sub-category, has actually declined. Convertible bond funds, typically referring to products whose fund contracts explicitly stipulate that investment in convertible bonds must constitute no less than 80% of non-cash assets, are classic tools within the "fixed income plus" strategy that balance equity and debt characteristics while pursuing elastic returns. Wind data shows that there are 38 actively managed convertible bond funds and 2 convertible bond ETFs in the entire market. As of the end of 2025, the total assets of the 38 actively managed convertible bond funds were 58.101 billion yuan, having decreased by 2.5 billion yuan in the fourth quarter of 2025; the assets of the 2 convertible bond ETFs stood at 61 billion yuan, having decreased by 9.1 billion yuan in Q4 2025. Combined, they shrank by a total of 11.638 billion yuan. It is noteworthy that the performance of convertible bond funds did not "drag down the average"—in the fourth quarter of last year, seventy percent of convertible bond fund products recorded positive net value growth rates, with nine products each achieving a net value increase of over 2%, outperforming pure bond funds. Amid this shift dominated by asset supply, a more symbolic structural change is occurring: the scale of convertible bond ETFs (61 billion yuan) has now surpassed that of actively managed convertible bond funds (58.101 billion yuan). Several interviewees analyzed that the current situation where ETF assets have overtaken active products may signal that index-based investing is moving towards the mainstream. Wu Yuening, a senior analyst at Morningstar (China) Fund Research Center, stated in an interview that the index-oriented transformation of convertible bond funds is the result of multiple factors working together. "On the demand side, long-term capital such as insurance funds and annuities have high requirements for the stability of asset allocation and risk control; the demand for 'index-tracking' configurations continues to rise, prompting fund companies to launch related products to attract long-term capital. On the supply side, since 2023, the convertible bond market has been in a state of 'net contraction'; the scarcity of investable targets has continuously compressed the space for actively managed funds to mine excess returns from individual bonds. After the valuation gaps of high-quality individual bonds were quickly filled, the marginal returns from in-depth research diminished. Furthermore, liquidity constraints in a shrinking market give the index-based 'buy-and-hold' strategy an advantage in terms of transaction costs." Zeng Fangfang, Public Fund Product Operations at Shenzhen Qianhai Paipai Wang Fund Sales Co., Ltd., added that market fund flows have clearly confirmed this trend: the share of index-based convertible bond products continues to grow, while non-indexed products are noticeably contracting. Some actively managed funds have also begun shifting towards an "index-enhanced" style, with their holding structures showing characteristics of diversification and indexation. Under the expectation of a shrinking convertible bond market, the demand for indexation will further strengthen, and the industry has already entered a stage of index-based development. During this index-oriented transformation, convertible bond ETFs have become a favored allocation tool due to their unique advantages. Zeng Fangfang indicated that under the current environment, the core advantages of convertible bond ETFs are concentrated in three areas: first, their fee rates are lower than those of active products, offering a significant long-term holding cost advantage; second, they offer excellent liquidity, support T+0 trading, have active daily average turnover, and facilitate easier capital movement; third, they provide high tracking efficiency and transparency, utilizing optimized replication strategies, resulting in controllable tracking errors and precise, transparent operation.