Debt base explosion means that the bonds of the bond fund have a substantial default, so this will lead to huge losses for the entire debt base.

Under normal circumstances, debt-based funds are often the safest type of funds in the entire market. The investment types of these funds mainly focus on bonds and earning interest.

However, the debt-based explosion means that when the fund buys a certain bond type, it is difficult to redeem the bond, and the investor loses all his principal.

On the surface, debt funds are generally more stable than the stock funds we invest in, but in fact, when the overall macro-finance deteriorates, the risk level of debt funds may be higher than that of stocks.

On the one hand, the economic downturn will lead to a sharp deterioration in the operating cash flow of severely affected enterprises, and the short-term financing capabilities of enterprises will face severe tests.

On the other hand, the returns on bonds themselves will continue to decline amid expectations of economic recession and ultra-loose monetary policy.