Pure debt

The proportion of stock investment is stipulated in the fund contract. Through this index, bond funds that are allowed to invest in stocks in the contract are excluded. Although there is no choice to mix the secondary debt base, there are indeed changes in individual contract types and other wonderful operations, resulting in the investment scope including stocks.

The stock market value and convertible bond market value are calculated according to the latest annual report. These two indicators ensure that the selected fund has a high probability of not holding stocks and convertible bonds at present.

Based on the index of the largest retreat in the past three years. If the fund has always been a pure bond, even if there are price fluctuations caused by interest rates, the maximum retracement should not be too large. After all, we are only pursuing a few points of income. If you withdraw two or three points, it will no longer be a stable happiness!

In addition, this indicator is also one of the indicators to measure risks, and at the same time, it can screen out debt bases with strong risk control ability.

profit

After meeting the requirements of pure debt, the fund is screened by income indicators.

Briefly introduce the income sources of bond funds.

Many friends will use the concept of cargo base to understand bond funds, thinking that debt base is a deposit or cargo base with higher returns and slightly greater risks.

As mentioned in the previous article on fund types, the commodity-based method is cost method, and the debt-based method is net worth method. The cargo base can bear interest every day like a deposit, while the debt base is valued according to interest rate changes and transactions. In other words, the net value of the debt base will fluctuate, with ups and downs. Unlike the goods base, which only goes up but not down, this should be clear.

Duration can be understood as the average duration of bonds, which is three years? Five years? Or ten years? Bond prices rise and fall with the rise and fall of interest rates, with different durations and different ranges.

The interest rate is down, which is suitable for the long term;

The interest rate goes up, which is suitable for short term.

Therefore, fund managers need to judge the future interest rate trend and adjust the duration to obtain income.

The risk of default is to avoid "stepping on thunder". This is the biggest risk of bond investment. Once you step on the thunder, even the main body is gone. Of course, the probability of thunderstorm is relatively small compared with the volume of bonds.