Since May, the annualized yields of money market funds have accelerated their decline. The 7-day annualized yields of several major money market funds have successively fallen below 1%. Previously, placing 10,000 yuan could earn over one yuan per day, but now the daily return is less than 0.3 yuan.
This situation is not uncommon. Wind data shows that as of May 21, among 978 money market funds in the entire market, 239 products have a 7-day annualized yield below 1%, accounting for 24.43%. The once "national wealth management tool" is seeing its return potential continuously narrow.
The equity market has also experienced increased volatility. After a previous steady uptrend, the A-share market has ended its unilateral rise and entered a phase of wide fluctuations. On May 21, the three major A-share indices all closed lower, with the Shanghai Composite Index falling below the 4100-point mark. Sector rotation within the market has accelerated, with previously strong-performing growth sectors leading the declines.
On one side, low-risk product yields continue to decline; on the other, A-share market volatility intensifies. Many investors face a dilemma: bank deposits offer returns insufficient for asset preservation needs, while direct market entry brings fear of volatility and drawdowns. Finding an allocation strategy that balances safety and returns has become a core challenge for public wealth management. Against this backdrop, secondary bond funds have emerged as a favored asset class.
The "Stabilizer" in Volatile Markets: The Allocation Value of Secondary Bond Funds Stands Out As an important branch of bond funds, secondary bond funds use bond assets as the core underlying position, with equity asset holdings strictly controlled within 20%. This unique stock-bond allocation structure gives the products strong adaptability and risk resistance.
Bonds form the foundation, acting as the ballast for the portfolio. They leverage the stable, low-volatility nature of bond assets to hedge against stock market corrections. Simultaneously, a small allocation to equities aims to capture market upside and enhance portfolio return potential, striving to "withstand downturns and keep pace with rallies."
Especially in the current structural market environment of accelerated A-share rotation and clear divergence between bulls and bears, secondary bond funds avoid the overly limited appreciation potential of pure bond products and the high volatility and drawdown risk of pure equity products, perfectly fitting the current difficult wealth management landscape.
The sustained influx of market capital also intuitively confirms the allocation value of secondary bond funds. Data shows that by the end of Q1 2026, the total scale of "fixed income plus" products in the entire market exceeded 3 trillion yuan, with secondary bond funds alone accounting for 2 trillion yuan. Since the beginning of 2025 alone, the scale of secondary bond funds has increased by a substantial 1.32 trillion yuan.
Changes in Total Market Secondary Bond Fund Scale
Data Source: Wind, as of March 31, 2026. Looking at the performance comparison of major fixed income product categories over the past year, "fixed income plus" categories like secondary bond funds and partial debt hybrid funds have comprehensively outperformed money market funds and pure bond funds in terms of returns while strictly controlling volatility and drawdowns, making their cost-effectiveness for wealth management increasingly prominent.
Performance of Bond Fund Indices Over the Past Year
Data Source: Wind, data as of May 12, 2026. China's fund operation history is relatively short; past performance does not indicate future results. In terms of anti-fall capability, secondary bond funds also perform well. Compared to the high-volatility characteristics of the Shanghai Composite Index, the trend of the secondary bond fund index is significantly more stable. During market adjustments, the drawdown of the secondary bond fund index is generally smaller, demonstrating impressive anti-fall attributes.
Secondary Bond Fund Index Trend Over the Past 20 Years
Data Source: Wind, time range May 22, 2006, to May 21, 2026. Index trends are for reference only, do not predict future performance, and do not constitute investment advice or promises.
Guotai Dingli: Combining Stocks and Bonds for Offense and Defense Guotai Dingli (Class A: 025966 Class C: 025967) is a typical secondary bond fund. The product's strategy core is clearly divided into two layers: a stable base + return enhancement.
The base position primarily consists of bond assets, selecting high-grade credit bonds while flexibly allocating long-duration interest rate bonds to solidify foundational returns and control portfolio risk.
The enhancement part opportunistically allocates to equity assets to capture structural market opportunities, focusing on high-dividend yield sectors and quality growth tracks. For convertible bonds, a "double low" strategy is employed to deeply explore opportunities from convertible bond terms, further boosting returns.
Fund manager Cheng Yao has a macro research background. She excels at judging major asset trends based on macro data, combining industry景气度 and标的 valuation to flexibly adjust the allocation ratios of bonds, stocks, and convertible bonds. Through refined risk management, she pursues steady asset appreciation.
Taking her representative "fixed income plus" product, Guotai Tongli A, as an example, as of April 30, 2026, the product achieved a one-year return of 9.37%, significantly exceeding its 5.66% performance benchmark and also higher than the 8.96% average return of its peers. Risk control is also excellent, with the product's maximum one-year drawdown at -2.47%, better than the peer average of -3.41%.
Guotai Tongli: Performance Trend Since Cheng Yao's Tenure
Data Source: Galaxy Securities, Wind, Guotai Fund, data as of: April 30, 2026; the fund was established on February 5, 2021, and fund manager Cheng Yao has been managing it since July 9, 2021. Fund performance has been verified by the custodian bank. Peer average refers to the Wind secondary classification - partial debt hybrid funds. China's fund operation history is relatively short; past fund performance does not indicate future results.
Latest Market Outlook At the recent Guotai Fund Summer Strategy Conference, Cheng Yao also shared her outlook on the stock, bond, and convertible bond markets, as well as insights on "fixed income plus" investing.
Equity Market: Slow Bull Trend Continues, Volatility Increases The market's slow bull pattern is expected to continue, but influenced by valuations, volatility has increased compared to previous years. The impact of geopolitical conflicts is gradually weakening, domestic macroeconomic operations are平稳, and corporate profits are improving. Simultaneously, the low-interest-rate environment is driving the transfer of household savings to the equity market, with incremental funds continuously entering. Key sectors to focus on include chemicals, new energy, non-ferrous metals, as well as midstream manufacturing areas like machinery and electronics benefiting from AI industry development.
Bond Market: Adhere to Coupon Strategy, Beware of Interest Rate Fluctuations Domestic macro expectations are平稳, monetary policy easing space is limited, and interest rates are expected to maintain a volatile trend overall. If inflation rebounds rapidly or the real estate sector recovers, interest rates may rise. Subsequent investment will focus on coupon strategies, cautiously managing market节奏.
Convertible Bond Market: Supply-Demand Dynamics Tighten, Market Volatility Increases Overall convertible bond supply has decreased in 2026, while demand from "fixed income plus" products for allocation remains strong. This supply-demand imbalance has pushed up convertible bond valuations, and high premiums have随之 increased market volatility. Overall盈利 probability remains可观, but asset return性价比 has declined.
Regarding specific operations, Cheng Yao believes: Maintain equity仓位 at a neutral to slightly positive level, balance industry and style布局, closely monitor valuations and trading热度, and flexibly capture structural opportunities. On the fixed income side, focus on credit investment, rely on coupons to solidify returns, seize short-term market recovery opportunities, while guarding against interest rate adjustment risks in the second half of the year. For convertible bonds, prioritize short-term波段 operations, strictly control drawdown risk, and steadily提升 portfolio returns.
Currently, volatility in the stock, bond, and convertible bond markets is放大 simultaneously. Capital market opportunities and challenges are交织. In volatile markets,稳健保值 and稳中增收 have become core demands for most investors. Secondary bond fund products, represented by Guotai Dingli, balance safety and return potential, better适应 volatile market asset allocation needs, and are a优质 choice for稳健布局 amidst market fluctuations.
Guotai Dingli Bond型 Securities Investment Fund Class A: 025966 Class C: 025967
Risk Disclosure
All funds currently managed by fund manager Cheng Yao are as follows: Guotai Min'an Zengli Bond A (transformation date November 24, 2021, performance benchmark: 90% * ChinaBond Composite Total Price Index Return + 8% * CSI 300 Index Return + 2% * CSI Hong Kong Stock Connect Composite Index Return (adjusted for valuation exchange rate), Cheng Yao has managed since December 30, 2022) Performance/benchmark for 2020-2025: 2.29%/0.43%, -8.62%/-1.48%, 0.69%/0.69%, 5.41%/6.20%, 6.90%/0.47%; Guotai Juli Value定期开放 Flexible配置 Hybrid型 Securities Investment Fund (establishment date March 27, 2018, performance benchmark: 50% × CSI 300 Index + 50% × ChinaBond Composite Index Return, Cheng Yao has managed since July 9, 2021, Cheng Zhou has managed since March 27, 2018) Performance/benchmark for 2020-2025: 5.52%/-1.21%, -2.09%/-10.80%, 1.21%/-4.68%, 3.62%/10.35%, 5.24%/7.94%; Guotai Xinli One-Year Holding Period Hybrid A (establishment date January 21, 2020, performance benchmark: 15% CSI 300 + 5% CSI Hong Kong Stock Connect + 80% CSI Composite Bond, Cheng Yao has managed since July 9, 2021) Performance/benchmark for 2020-2025: 9.44%/2.81%, -1.98%/-1.17%, 1.10%/1.45%, 3.57%/9.82%, 7.09%/4.54%; Guotai Tongli 9-Month Holding Period Hybrid A (establishment date February 5, 2021, performance benchmark: 15% CSI 300 + 5% CSI Hong Kong Stock Connect + 80% CSI Composite Bond, Cheng Yao has managed since July 9, 2021) Performance/benchmark for 2020-2025: 8.55%/1.41%, -2.26%/-1.17%, 1.42%/1.45%, 3.12%/9.82%, 8.65%/4.54%; Guotai Heli 6-Month Holding Hybrid A (establishment date March 14, 2025, performance benchmark: 80% * ChinaBond Composite Total Price Index Return + 15% * CSI 300 Index Return + 5% * CSI Hong Kong Stock Connect Composite Index Return (adjusted for valuation exchange rate), Cheng Yao has managed since March 14, 2025): 4.90%/3.10%, as of the end of June 2025, the fund had been established for less than half a year, so performance data is not列示. Data source: Product定期 reports. Funds carry risks, investment requires caution. This fund is issued and managed by Guotai Fund.代销 institutions do not bear the investment and兑付 responsibility for the product. The past performance of the fund does not predict its future performance. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. The fund manager promises to manage and use the fund assets with honesty,信用, diligence, and responsibility, but does not guarantee that the fund will be profitable, nor does it guarantee a minimum return. This fund is a bond型 fund, theoretically its expected收益 and expected风险 are higher than those of money market funds and lower than those of hybrid funds and stock型 funds. When this fund invests in Hong Kong Stock Connect标的 stocks, it will face specific risks arising from differences in the investment environment, investment标的, market system, and trading rules under the Hong Kong Stock Connect mechanism. Investment involves risks. Before making an investment decision, investors should carefully read the fund's "Prospectus" and "Fund Contract," fully consider their own risk承受能力, and invest cautiously.
Comments