Funds that follow a "fixed income plus" strategy, which balance stability with liquidity management while also offering some exposure to potential stock market gains, have become a favored choice for household investments. In the current environment of heightened market volatility, the principle of "seeking progress while maintaining stability" is a key consideration for many investors when selecting investment products. China Merchants Fund is set to launch the China Merchants Yongli Bond Fund (Class A: 028319; Class C: 028320) on July 23rd. This secondary bond fund employs a "fixed income plus" strategy and is slated to be managed by Zhang Fei from the Multi-Asset Investment Department, aiming to provide investors with moderate risk appetites a new allocation option that balances steadiness with growth potential.

China Merchants Yongli Bond Fund has a clear positioning: it uses bond assets as the core portfolio to generate stable returns, while appropriately participating in equity assets like stocks to enhance overall returns. Bond assets will constitute no less than 80% of the fund's total assets, while equity assets, along with convertible bonds and exchangeable bonds, will make up between 5% and 20% of the fund's assets (please refer to the fund's legal documents for the complete investment strategy).

Manager Profile: Zhang Fei's Engineering Lens and Deep Research Focus

Zhang Fei, the designated fund manager for China Merchants Yongli Bond Fund, holds a Bachelor of Engineering from Huazhong University of Science and Technology and a Master of Finance from Shanghai Jiao Tong University. He has 8.8 years of experience in the securities industry, including 5.9 years in securities research and 2.0 years in securities investment. His career has spanned roles as a credit bond researcher, convertible bond researcher, and fund manager. He joined China Merchants Fund in 2025 and currently manages funds such as the China Merchants Shuangyi Balanced Hybrid Fund.

Zhang Fei consistently applies a rigorous, engineering-based research perspective, complemented by solid technical knowledge. In his investment approach, he emphasizes independent thinking and in-depth research, delving into underlying technical details and continuously refining his understanding of various industries. He focuses on a bottom-up approach to identify growth stocks in hard technology sectors, valuing technological barriers and growth potential in stock selection. Zhang maintains a strong interest in economic development, product technology, and commercial society, concentrating on capturing investment opportunities arising from industrial transformation and technological advancement. His current focus areas include AI, humanoid robotics, high-quality manufacturing companies expanding overseas, dividend-paying stocks, and cyclical recovery sectors.

His core investment philosophy is to "create a 'fixed income plus' strategy with an edge, aiming for a superior risk-return profile." For pure bond investments, the focus is on obtaining stable coupon income without taking on excessive credit risk. For convertible bonds, sub-strategies are selected based on market style and valuation levels. For equity investments, a balanced allocation approach is adopted, adjusting sector exposure based on industry momentum and valuation, aiming to capture structural opportunities in the equity market to generate incremental alpha. Furthermore, he places significant emphasis on controlling portfolio drawdowns, primarily through methods like style hedging, switching between high and low valuation segments, and prudent timing to optimize the risk-return ratio.

China Merchants Fund adheres to the principle of "investment driven by deep research," and its active fixed income team has consistently delivered leading medium to long-term performance. According to data released by a fund rating agency in July 2026, as of June 30, 2026, China Merchants Fund ranked first among 116 peer companies for the absolute return of its active fixed income funds over the past seven years, and also took the top spot among 127 peers for absolute returns over the past five years. In a AAAAA-rated fund management company evaluation report by Tianxiang Investment Consulting for Q1 2026, China Merchants Fund achieved the highest 5A rating in the "Three-Year Comprehensive Fund Manager Rating." It also received the top 5A rating in both the "Three-Year Active Equity & Hybrid Fund Rating" and the "Three-Year Active Bond Fund Rating" sub-categories, demonstrating its investment strength across multiple dimensions as recognized by authoritative institutions.

Market Outlook: Valuing the Window of Opportunity in Undervalued Areas

Regarding the market outlook, Zhang Fei holds a positive view. He believes that following the recent market adjustment, numerous investment opportunities in undervalued areas have emerged, not only within the AI industry chain but across many other sectors. He sees room for further upside in the equity market in 2026. In terms of strategy, he plans to adopt a balanced allocation approach. On one hand, he will look for companies within the AI ecosystem that have solid fundamentals, hold key positions, and have seen significant recent alleviation of valuation risks. On the other hand, he will continue to seek out excellent manufacturing enterprises across various industries that possess strong global competitive advantages, demonstrate steady earnings growth, and are trading at historically low valuations. Additionally, he is closely monitoring and proactively positioning in areas like physical AI and humanoid robotics, where positive industrial changes are occurring.

Regarding convertible bonds, the current average premium per hundred yuan in the convertible bond market is at a historically high level over the past decade. In this environment of coexisting opportunities and challenges, Zhang Fei stated he will employ a "balanced high-volatility" sub-strategy, actively capturing structural opportunities while controlling for volatility.

Data Notes: The subscription period for the China Merchants Yongli Bond Fund is from July 23, 2026, to August 7, 2026. For more information, please refer to the fund's prospectus and other legal documents. The fund's "fixed income plus" strategy refers to using fixed income as the foundation while supplementing with equity assets, aiming to pursue long-term stable returns under the premise of strict risk control. Excess return represents the portion of a fund's return that exceeds its performance benchmark over a specific period. The information herein reflects the fund manager's investment philosophy; the fund's specific investment strategy is detailed in its legal documents. The investment directions noted by the fund manager are based on current market conditions and may adjust with market changes; the specific investment strategy is detailed in the fund's legal documents. As of June 30, 2026, Zhang Fei has 8.8 years of securities industry experience (including 5.9 years in securities research and 2.0 years in securities investment). Zhang Fei's fund management history includes: China Merchants Shuangyi Balanced Hybrid Securities Investment Fund (from November 4, 2025, to present) and China Merchants Convertible Bond Select Bond Securities Investment Fund (from November 26, 2025, to present).

The absolute return ranking data for fund companies was released by the fund evaluation agency Guotai Haitong Securities in July 2026, with data as of June 30, 2026. The evaluation was conducted according to the "Interim Measures for the Administration of Securities Investment Fund Evaluation Business." Net asset values of public funds are published after verification by custodians. The absolute return of a fund management company refers to the net asset value growth rate of the active funds it manages, weighted by the assets under management during the period. Active equity funds include active open-end stock funds, strong equity hybrid funds, partial equity hybrid funds, balanced hybrid funds, flexible hybrid funds, flexible strategy hybrid funds, and active closed-end hybrid funds, excluding index funds, lifecycle hybrid funds, partial bond hybrid funds, Hong Kong stock flexible strategy hybrid funds, Hong Kong stock partial equity hybrid funds, Hong Kong stock strong equity hybrid funds, and QDII funds. Active fixed income funds include pure bond funds, closed-end pure bond funds, quasi-bond funds, closed-end quasi-bond funds, partial bond funds, closed-end partial bond funds, convertible bond funds, and short-term bond funds, excluding money market funds, wealth management bond funds, amortized cost bond funds, and bond index funds. The AAAAA rating data was released by the fund evaluation agency Tianxiang Investment Consulting in April 2026, with three-year rating data as of March 31, 2026. The evaluation was conducted according to the "Interim Measures for the Administration of Securities Investment Fund Evaluation Business." Tianxiang's comprehensive fund manager rating is based on analysis and assessment of three major aspects: the fund manager's fundamental strength, investment management capability, and company stability (including compliance). Fund managers are sorted from high to low based on their overall comprehensive score and divided into five grades from AAAAA to A. Active equity & hybrid funds, in terms of fund type, include five secondary classifications: stock funds - actively managed stock funds, hybrid funds - partial equity hybrid funds, hybrid funds - flexible allocation hybrid funds, hybrid funds - balanced allocation hybrid funds, and hybrid funds - partial bond hybrid funds. Active bond funds, in terms of fund type, include three secondary classifications: bond funds - pure bond funds, bond funds - mixed bond funds, and bond funds - convertible bond funds.

No subscription/purchase fees are charged for Class A fund shares purchased/subscribed through the fund's direct sales institution. Subscription/purchase fees apply for Class A fund shares purchased/subscribed through distributing institutions. This fund's Class C shares do not charge subscription/purchase fees. The fund's sales service fee is 0% per annum for Class A and 0.2% per annum for Class C. No sales service fee is charged for Class C fund shares purchased/subscribed through the fund's direct sales institution. For Class C fund shares purchased/subscribed through distributing institutions and held for more than one year (i.e., 365 days), the continuing sales service fee charged will be refunded to the investor along with the redemption proceeds (or liquidation proceeds) upon redemption of fund shares or termination of the fund contract.

Risk Disclosure: The fund manager commits to managing and utilizing the fund's assets with honesty, diligence, and prudence but does not guarantee that the fund will be profitable or promise a minimum return. The fund's past performance and its net asset value level do not indicate its future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. The fund manager's past performance does not guarantee the performance of this new fund. If this fund invests in Hong Kong Connect-listed stocks, it will also be subject to exchange rate risk and risks associated with overseas markets. Investors should read the fund contract, prospectus, fund product summary, and other legal documents carefully before investing. This product is issued and managed by China Merchants Fund Management Co., Ltd. Distributing institutions do not assume responsibility for the investment performance or redemption of the product. The market involves risks; fund investment requires caution. Investors are advised to choose products that match their risk tolerance and investment objectives.