What is the CSI Total Debt Index? The CSI Total Bond Index is a comprehensive bond market index issued by CSI Index Co., Ltd., including RMB bonds, corporate bonds, central government bonds, local government bonds, financial bonds, asset-backed securities and other bonds. This index is widely representative and influential in China bond market, and it is one of the important indicators to measure the overall performance of China bond market.
Its advantage is that it is a passively managed fund, aiming at tracking the performance of the CSI total debt index, rather than surpassing it. Compared with actively managed funds, tracking funds have lower management costs and do not need investment managers to make complex investment decisions, thus reducing the risk of fund management. Based on the characteristics of tracking index, the portfolio of tracking fund is relatively stable and more suitable for long-term holding.
Our investment strategy usually adopts the copy investment strategy, that is, we build a portfolio by buying the constituent bonds of the CSI total debt index, so as to achieve similar income performance to the CSI total debt index. Since the CSI Total Bond Index contains many types of bonds, the portfolio of the tracking fund will also contain many types of bonds. At the same time, the holding period of the tracking fund portfolio is generally similar to the CSI total debt index, and the average period of the portfolio will not be too long or too short.
There are market risk and credit risk in risk analysis. Market risk refers to the risk that bond prices fluctuate due to macroeconomic environment, interest rate changes and other factors, thus affecting the net value of funds. Credit risk refers to the risk of bond default or price decline due to factors such as bond issuer default or credit rating decline, which affects the net value of the fund. The investment portfolio of the tracking fund is passively managed, and it can only achieve similar income performance to the CSI total debt index, and cannot exceed the index. The performance of the tracking fund will be limited by the performance of the CSI total debt index.