The investment goal is to pursue long-term stable appreciation of fund assets on the basis of reasonable control of credit risk and prudent investment.

The investment concept comprehensively evaluates the risk premium level of credit bonds according to the trend of macroeconomic changes and the operating conditions of enterprises. On this basis, we strive to obtain optimized holding period income and credit spread fluctuation income by active strategy, and at the same time reduce the adverse effects of systemic interest rate risk and credit risk on portfolio assets through asset allocation and enterprise selection, so as to maximize the income after fund portfolio risk adjustment.

Scope of Investment The investment objects of the Fund are financial instruments with good liquidity, including bonds, stocks, warrants and other financial instruments permitted by laws and regulations or China Securities Regulatory Commission, which are issued and listed in China according to law. The Fund mainly invests in fixed income financial instruments with good liquidity, including corporate bonds, corporate bonds, short-term financing bonds, local government bonds, commercial bank financial bonds, subordinated bonds of commercial banks, convertible corporate bonds (including convertible corporate bonds traded separately), asset-backed securities, positive repurchase, reverse repurchase, national debt, central bank bills, policy financial bonds, bank deposits and other fixed income categories permitted by laws, regulations or regulatory authorities. The Fund can also invest in stocks, warrants and other equity financial instruments permitted by laws and regulations or regulatory authorities. The Fund does not directly buy equity financial instruments such as stocks and warrants from the secondary market, but can participate in the initial public offering or new share issuance of stocks in the primary market, and can hold stocks converted from convertible corporate bonds held, warrants distributed for holding stocks, and warrants generated from investing in convertible bonds traded separately. If future laws, regulations or regulatory agencies allow the fund to invest in other varieties, the fund manager can include them in the investment scope after performing appropriate procedures.

Investment Strategy The Fund adopts a combination of top-down and bottom-up investment strategies to achieve the best ratio of risks and returns under the premise of strictly controlling risks. 1. Asset allocation strategy On the basis of analyzing and judging the macroeconomic situation at home and abroad, the trend of market interest rates, credit spreads and the relationship between supply and demand in the bond market, the Fund will determine the allocation of major financial assets and the generic allocation of credit bond financial instruments from top to bottom, dynamically adjust the portfolio duration and credit bond structure, and choose credit bonds from bottom to top to build and adjust the fixed-income investment portfolio to obtain optimized income. Under the premise of strictly controlling risks, the Fund will also moderately participate in the initial public offering and new share issuance in the primary market according to the interest rate cycle, macroeconomic environment and capital market conditions, adjust the investment ratio of fixed-income assets, and further improve the portfolio income. 2. Investment strategy of credit bond financial instruments (1) The generic allocation strategy of credit bond financial instruments refers to timely and dynamically allocating and adjusting the proportion of credit bond financial instruments in various markets and types, and determining the asset portfolio that best meets the risk-return characteristics of the fund. Specifically, it includes two levels: market allocation and variety selection. In terms of market allocation, the Fund will adjust the investment proportion of credit bond financial instruments in different markets on the premise of controlling market risk and liquidity risk, according to the yield to maturity changes, liquidity changes and market scale of credit bond financial instruments in the exchange market and the inter-bank market. In terms of variety selection, the Fund will optimize the allocation of various credit bond financial instruments by combining quantitative analysis and qualitative analysis according to the changing characteristics of the credit spread level of various credit bond financial instruments, macroeconomic forecast analysis and tax factors, and taking into account factors such as liquidity and profitability. (2) Long-term adjustment of strategic credit bonds is also affected by interest rate risk. Based on the analysis and judgment of the macroeconomic situation and monetary policy that affect bond investment, the Fund forms an expectation of the future direction of market interest rate changes, and then actively adjusts the duration value of its bond portfolio to achieve the purpose of increasing income or reducing losses. When the overall market interest rate is expected to decrease, the Fund will extend the duration of the bond portfolio it holds, so as to gain the benefits of bond price increase when the market interest rate actually decreases; On the other hand, when the overall market interest rate level is expected to rise, the duration of the portfolio will be shortened to avoid the capital loss caused by the risk of falling bond prices and obtain higher reinvestment income. (3) Yield curve allocation strategy The Fund will comprehensively examine the yield curve and the credit spread curve, and adjust the position of the portfolio through the morphological changes of the expected yield curve and the trend of the credit spread curve. On the basis of investigating the yield curve, the Fund will decide to adopt centralized strategy, dumbbell strategy or trapezoidal strategy. In order to profit from the deformation of the yield curve and the relative price changes of credit bonds with different maturities. Generally speaking, when the expected yield curve becomes steep, the foundation adopts a centralized strategy; When the expected yield curve becomes flat, dumbbell strategy will be adopted; When the expected yield curve remains unchanged or moves in parallel, the trapezoidal strategy is adopted. The Fund will also determine the industry allocation of credit bonds and the investment ratio of credit bonds of various credit grades by studying the economic cycle, market supply and demand and liquidity changes that affect the credit spread curve. (4) The credit spread of credit bonds based on credit change strategy is closely related to the industry characteristics of bond issuers and their own situation. The Fund will establish the internal rating of credit bonds based on the internal credit rating system of the Fund, analyze the default risk and reasonable credit spread level, and make an independent and objective value evaluation of credit bonds through detailed investigation and research such as industry analysis, company assets and liabilities analysis, company cash flow analysis, company operation management analysis and company development prospect analysis. (5) Spread Strategy When the repo rate is lower than the bond yield, the Fund will implement positive repurchase and will invest the capital in credit bonds to obtain the arbitrage value (i.e. the repo rate) in which the bond yield exceeds the cost of the repurchase funds. (6) Credit Bond Selection Strategy The Fund will establish different types of yield curve prediction models and credit spread curve prediction models according to the yield level of the credit bond market, taking into account factors such as credit rating, maturity, liquidity, market segmentation, coupon rate, tax characteristics, early repayment and redemption, and make valuation through these models, focusing on selecting credit bonds with the following characteristics: high yield to maturity, high current income, undervalued value and good credit expectation. (7) Investment Strategy of Convertible Corporate Bonds On the basis of comprehensive analysis of factors such as stock characteristics, debt characteristics, liquidity and dilution rate of convertible corporate bonds, the Fund uses quantitative valuation tools such as Black-Scholes option pricing model and binary tree option pricing model to evaluate its investment value, and selects one with high margin of safety, relatively favorable issuance terms and good liquidity. And buy and hold varieties with excellent fundamentals, strong profitability, good growth prospects, active stocks and great rising potential at a reasonable price, and build a convertible corporate bond portfolio according to internal rate of return, discount premium, duration, convexity and other factors to obtain a stable return on investment. In addition, the Fund will analyze the relative value of convertible corporate bonds in different market environments, and try to choose the varieties undervalued by the market through reasonable pricing of the underlying convertible bonds, thus constructing the investment portfolio of the Fund's convertible corporate bonds. When there are arbitrage opportunities between convertible corporate bonds held by the Fund and stocks or the liquidity of convertible corporate bonds is temporarily insufficient, in order to maximize the investment income, the Fund converts its convertible corporate bonds into stocks and sells them at the right time. (8) Investment Strategy of Asset-backed Securities The Fund will deeply analyze fundamental factors such as market interest rate, issuance terms, composition and quality of asset-backed securities, prepayment rate, risk compensation income, market liquidity, etc., estimate the risk of asset default and prepayment, and simulate the cash flow process of debt service income of asset-backed securities according to the income structure arrangement of asset securitization, and evaluate its intrinsic value with the help of quantitative pricing models such as Monte Carlo method. 3. Investment strategy of treasury bonds and central bank bills As a risk-free interest rate investment, treasury bonds and central bank bills mainly provide better liquidity for the fund portfolio. Treasury bonds and central bank bills are greatly influenced by macro factors such as monetary policy, interest rate cycle and inflation. On the basis of comprehensive analysis of the above factors, we mainly adopt long-term management and yield curve strategy, and allocate investment products with appropriate maturity to control interest rate risk and obtain relatively good interest rate risk returns. In the stable market interest rate environment, through the repurchase of arbitrage investment treasury bonds and central bank bills, you can get better liquidity spread income. For cross-market treasury bonds, because of the differences between banks and exchange markets, arbitrage gains from cross-market transactions can also be obtained. Treasury bonds and central bank bills have good mortgage repurchase financing function, which plays a liquidity support role in amplifying fund asset investment and emergency large-scale fund redemption. 4. The historical experience of the new share subscription strategy shows that due to the existence of the price difference between the primary and secondary markets, participating in the new share subscription can obtain higher returns. The Fund will fully study the fundamentals of initial public offering (IPO) shares and new shares issued by listed companies, estimate the reasonable price of new shares listed and traded according to the overall pricing level of the stock market, and refer to the relationship between capital supply and demand in the primary stock market. On this basis, it will prudently participate in the subscription of new shares and obtain the differential income in the primary and secondary stock markets on the basis of limited risks. The fund's share obtained by subscribing for new shares shall be sold at its market price and reasonable intrinsic value within 3 months after it can be listed and traded or the circulation restriction is lifted.

Dividend policy 1. During the closed period of the Fund, the income distribution shall follow the following principles: (1) The income distribution method of the Fund is cash; (2) Each fund share enjoys equal distribution rights; (3) The net value of fund shares on the base date of fund income distribution (that is, the deadline for calculating the distributable profit at the end of the period) cannot be lower than the face value after deducting the income distribution amount of each fund share; (4) Under the premise of meeting the dividend conditions of relevant funds, the fund income distribution is at most 12 times a year, and at least 1 time; (5) Under the premise of meeting the above income distribution conditions, the annual income distribution ratio shall not be less than 90% of the realized income of the fund year. If the fund contract takes effect less than 3 months, no income shall be distributed; (6) Where laws, regulations or regulatory agencies provide otherwise, such provisions shall prevail. 2. After the closed conversion of the Fund into a listed open-end fund (LOF), the income distribution of the Fund follows the following principles: (1) On the premise of meeting the dividend distribution conditions of relevant funds, the maximum number of income distributions of the Fund is 12, and the proportion of each income distribution is not less than 60% of the distributable profit at the end of the period (that is, the base date of income distribution); (2) The bank transfer or other formalities occurring in the process of income distribution shall be borne by the investors themselves; When the investor's cash dividend is less than a certain amount, which is not enough to pay for bank transfer or go through other formalities, the fund registration institution can automatically convert the investor's cash dividend into fund shares according to the net value of ex-dividend units; (3) There are two ways to distribute fund income: cash dividend and dividend reinvestment, and fund shares registered in the registration system. Investors can choose cash dividends or automatically convert the net value of fund shares on the day when cash dividends are reinvested into fund shares for reinvestment; Investors who choose the dividend reinvestment method are exempt from subscription fees for the fund shares converted from their dividends; If investors do not choose, the default income distribution method of the Fund is cash dividend. Fund shares registered in the securities registration and settlement system can only be distributed in cash dividends, and investors cannot choose other dividend distribution methods. Specific income distribution procedures and other related matters shall follow the relevant regulations of Shenzhen Stock Exchange and China Securities Depository and Clearing Co., Ltd.; (4) The time from the date of fund dividend distribution to the benchmark date of income distribution (that is, the deadline for calculating the distributable profit at the end of the period) shall not exceed 65,438+05 working days; (5) The net value of fund shares minus the income distribution amount of each fund share on the base date of fund income distribution cannot be lower than the face value; (6) Each fund share enjoys equal distribution rights; (7) Where laws, regulations or regulatory agencies provide otherwise, such provisions shall prevail.

Performance benchmark: the total full-price index rate of China Bond Corporation bonds ×80%+ the total full-price index rate of China Bond Treasury bonds ×20%.

Risk-return characteristics This fund is a bond fund, which belongs to the low-risk variety of securities investment funds. The expected returns and risks of funds are higher than those of money market funds, but lower than those of hybrid funds and equity funds.