The main investment target of bond funds is bonds, so the rise and fall of the bond market has a great influence on bond funds, so if you want to know what factors affect the rise and fall of bond prices, let's look down together.

what is the relationship between the rise and fall of bond funds?

I. bond market

As mentioned at the beginning of the article, the bond market is the main influencing factor for the rise and fall of bond funds, and the bond market is mainly influenced by several aspects.

1 economic development:

economic growth determines the return on assets, and higher returns allow higher debt costs, so economic growth is directly proportional to the bond market interest rate. When the economy faces downward pressure, the bond market interest rate will also face downward pressure, which will benefit the bond market.

our simple understanding is that if the economy is in good condition, we will have more investment options, such as stocks and funds, which have higher returns than bonds. However, if the downward pressure on the economy increases and other investment channels are more likely to lose money, they will be more inclined to buy bonds, which is good for the bond market.

when we measure the current economic development and fundamentals, we can take a look at GDP and inflation level. The former shows the economic growth intuitively, while the latter has a far-reaching impact on the interest rate level. The increase in inflation rate will lead to an increase in interest rates, which will be bad for the bond market.

2 Economic policy:

(1) Monetary policy affects the trend of the bond market by affecting the money supply.

loose monetary policy-lower bond interest rate-favorable bond market

tight monetary policy-higher bond interest rate-unfavorable bond market

Common policy tools, such as the central bank's RRR cut, the relaxation of funds to increase the statutory deposit reserve ratio, and the tightening of funds.

(2) fiscal policy affects the trend of the bond market by affecting the economic operation.

a proactive fiscal policy will stimulate the total social demand, increase the probability of economic strength, and thus benefit the bond market. This can generally be seen through the government's annual budget deficit and fiscal deficit ratio.

3 the relationship between supply and demand

this is well understood, that is, when the bond issuance is large, the demand of everyone is insufficient, and the bond price will fall. If the circulation is small and tight, everyone will chase after it and the price will naturally go up.

4 Market sentiment

This is closely related to the first point, that is, when economic expectations are good and people are in high spirits, they will be more willing to invest in investment products with higher risks but also higher returns. There are so many investors and so many funds. When all the money goes to other markets, the bond market becomes cold and the price will fall.

Second, other investment products

Although 8% or more of the assets of bond funds are invested in bonds, the remaining 2% will often have a great impact on the debt base if it fluctuates greatly.

On the whole, the fluctuation of bond funds is relatively small. We can also analyze it from a macro perspective and have our own judgment on the general bond market, but the final comprehensive income will be affected in many ways.

Based on the overall judgment of the market, we also need to adjust our operation. Although the debt-based market is a long-term investment product, we also need to take profits in time, otherwise, the proportion of losses is not bluffing at the stage when the debt-based market continues to decline, mainly because it is a relatively painful process to wait for the rebound later.