A: Leveraging to amplify the investment effectiveness of funds is a common investment method for bond funds, especially closed-end bond funds. Since more than 80% of the funds of bond funds are used to buy and hold bonds, fund managers can buy back some bonds they hold as collateral in the market, and then buy bonds or invest in other varieties after financing, so the total assets of bonds will be much greater than the net asset value of the fund.

Because ordinary open-end bond funds need to consider liquidity, in order to cope with the redemption pressure at any time, the proportion of fund managers using leverage is relatively small, so the proportion of bonds held is usually less than the net asset value. However, for closed-end bond funds, the arbitrage leverage can be appropriately enlarged, even reaching more than 1 times. The higher leverage ratio makes the fund with closed-end trading mode get higher returns in the bond market.