The economy continues to operate within a recovery phase, with structural characteristics gradually becoming more evident, leading to ongoing discussions within the bond market. Against this backdrop, Du Juntian, Portfolio Manager of the HuaShang HongYu Interest Rate Bond Fund, has elaborated on the operational logic of the bond market in the fund's periodic report, incorporating changes in the macroeconomic environment.
Du Juntian reviewed in the fund's periodic report that since the fourth quarter, the domestic macroeconomy has exhibited a weak yet stable trend, with quarterly GDP growth rates declining throughout the year, while inflation recovery has shown structural characteristics. Data on domestic demand and credit indicate that the household sector remains a weak spot in the economy. Despite this, bond market expectations for next year's economic growth and inflation have improved, a phenomenon not significantly dampened by this weakness. Instead, positive policy changes have boosted market confidence.
Du Juntian pointed out that the government's "anti-involution policies," by reducing ineffective competition and promoting price stability on the supply side, particularly for certain industrial goods, have provided a relatively clear policy floor for prices. Simultaneously, the widening gap between M1 and M2 has laid the groundwork for a potential price rebound.
Furthermore, signals from important meetings in December suggest that broad fiscal expenditure is expected to maintain its intensity next year and will further tilt towards the household sector and service consumption in terms of policy direction, providing positive support for the market outlook. Additionally, the phased alleviation of geopolitical disturbances and the spillover effects from looser overseas policies will continue to support exports. Meanwhile, potential imported inflation also supports the subsequent recovery of domestic price indicators, further enhancing market recovery expectations.
Amid intertwined bullish and bearish factors in both fundamentals and liquidity, the influence of institutional behavior in the bond market has increased. Although concerns about supply-demand imbalances for ultra-long-term bonds may adversely affect the market before clear support emerges, there is no need for excessive worry about future supply issues, given that domestic credit expansion still relies on the government sector and monetary policy remains appropriately accommodative.
Regarding operational strategy, Du Juntian stated that the fund portfolio was adjusted to a bullet structure at year-end to capitalize on curve convexity points and roll-down opportunities, aiming to build a more robust portfolio structure for 2026.
Data Note: As of December 31, 2025, Du Juntian has 10.6 years of experience in the securities industry, including 1.5 years in securities trading, 1.8 years in securities research, and 6.6 years in securities investment. He joined HuaShang Fund Management Co., Ltd. in April 2024. His current fund management roles include: HuaShang HongYu Interest Rate Bond Fund (since November 6, 2024); HuaShang HongYi One-Year Regularly Open Bond Fund (Initiation Type) (since December 23, 2024); HuaShang HongYuan Three-Month Regular Open Pure Bond Fund (since July 11, 2025); and HuaShang HongChang 39-Month Regular Open Interest Rate Bond Fund (since July 11, 2025). The views expressed in the article are sourced from the fund's periodic reports and represent the investment philosophy of the fund manager. For detailed fund investment strategies, please refer to the fund's legal documents.
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