Bond investment strategy and hedging strategy
Bond is a good product for investors who pursue the security of principal and liquidity demand. In the repayment order, creditor's rights take precedence over equity, so in the event of default, bonds have priority to claim compensation, which makes bond investment play a particularly prominent role in maintaining value. If you need to consider liquidity, you can refer to the following fixed-income bonds.
1, Monetary Fund. The familiar money fund is famous for its safety and high liquidity. At any time, it is an important tool to realize and maintain customer needs. In addition, the change of money fund interest rate is more sensitive than the change of bank ultra-short-term wealth management interest rate.
2. National debt. In the eyes of ordinary people, China's national debt is endorsed by the credit of China government, which is more reliable than bank savings deposits. China's national debt is divided into one-year, three-year, five-year and ten-year periods, including voucher-type, electronic and book-entry national debt. Discounted US Treasury bonds are mainly short-term, with four maturities of four weeks, three months, six months and one year, and the issuance frequency is weekly and monthly. Holding both local currency and US dollar treasury bonds can not only match the maturity period, but also hedge the exchange rate risk.
3. Invest in high-grade bonds. High-grade bonds have transparent prices and high liquidity. If you don't want to spend time studying, then find out the hard asset 3A bonds that are less affected by the cycle and buy them.
Fixed cash flow demand
Elderly customers who aim at retirement investment usually consider fixed cash flow income when investing, that is, gain current income. Under normal circumstances, China bonds pay interest once a year, while American coupon bonds generally pay interest once every six months, which will generate cash flow income. Choosing relatively high bonds in coupon rate is the best way to get cash flow.
Participate in investment in international bond markets.
Considering the mutual penetration of global economy and global crisis when the financial crisis broke out, we know from the debt crisis of some countries that national risk has also become an important risk factor. Our investment risk needs are dispersed by international tools.
1. Select hedge funds related to foreign exchange risk.
2. Choose a single country, developed countries and emerging market funds for investment. For example, if an investor is optimistic about the currency of an emerging market and wants to gain risk exposure, he can buy bonds denominated in that country's currency.
3. Holding bonds denominated in local currency and US dollars. For example, when investors buy bonds denominated in other countries' currencies, they will face the risk of currency fluctuations. At this time, you can in turn buy bonds denominated in local currency or US dollars to improve the risk resistance of your portfolio. Usually, people like to hedge the risk of dollar-denominated bonds.
Adjusting bond strategy through curve duration
We have studied the investment portfolio with a duration of 10 years. The steep yield curve shows that the portfolio performs well and can continue to be held. Or the curve is flat, indicating that the combination is poor and the strategy needs to be adjusted. For the combination during 10-30, the flat curve indicates that the combination trend is good; Once the curve becomes steep, it means that the combination needs to be adjusted.
spread risk
Buying bonds does not mean spreading risks. Only by avoiding the risk factors in bond investment and making a good investment portfolio can the risk be truly dispersed. These risk factors that we have to ignore are liquidity, volatility, duration, credit and so on.
1. Invest in bonds of industries that are not easily affected by economic cycle fluctuations. These industries include public utilities, health care, education and health care. These industries are usually just needed industries.
2. Buy anti-inflation bonds. For example, inflation-protected treasury bonds in the United States can help investors offset the losses caused by inflation and compensate investors in proportion to the increase in the consumer price index.
3. Buy credit default swaps.
4. Hedge interest rate risk by purchasing options.
Do a good job in planning creditor's rights and assets
For institutional investors, every investment fund should make a payment plan due in the future. For example, pension funds need to match the annual pension expenditure budget with the investment period. Similarly, when building a portfolio, individual investors will also consider future cash flow expenditures, such as children's education, house purchase plans and pension expenditures.
1. In general, buying a series of bonds with different remaining maturities is one of the common methods to control future cash flow income. For example, investors buy bonds due within five years to match their cash plans within five years.
2. There is also a common zero coupon bond in the world, which can also be used for future expenditure matching. Zero coupon bond is a bond that pays no interest but can be sold at a discount. Its biggest feature is that the actual rate of return is yield to maturity. Unlike interest-bearing bonds, the interest received must be reinvested in yield to maturity to achieve this rate of return (as we emphasized in the short-term bond). Need to be reminded that this product is not suitable for customers with fixed cash flow needs, because interest is not paid halfway.
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