Pure debt funds do not involve the stock market, which makes many people think that pure debt funds are risk-free. In April this year, the loss of 90% pure debt funds made many investors hard to prevent. There are two reasons for the loss of pure debt funds.

There are two reasons for the loss of pure debt funds:

1, the seesaw effect of stock market and bond market

Generally speaking, there is a seesaw effect between the stock market and the bond market. When the stock market performs well, the bond market is relatively weak, and when the bond market performs well, the stock market is relatively weak. This time, the pure debt fund suffered a large-scale loss on the premise that the bond market continued to rise, which has a lot to do with the successive break of new shares. After the lottery system is adopted under GEM and SME board, once the lottery is won, the impact of new shares on the expected annualized expected return of bond funds will be much greater than before. Therefore, once the new shares do not perform well after listing, it may directly lead to the loss of bond funds.

2. Expected annualized interest rate changes

The biggest risk of bonds comes from the change of expected annualized interest rate. If the coupon price of the bond itself has been determined and the expected annualized interest rate has been reduced after the central bank cuts interest rates, then the expected annualized interest rate can only be reduced by raising the coupon price, which brings real expected annualized expected income to many people who bought bonds before. At this time, you will lose money, unless you raise interest rates or the previous increase is too fast, and the temporary par price drops, which will cause certain losses.

These bonds can't be redeemed.

Another additional situation is that one of the bond products bought by this fund is unable to pay or goes bankrupt. A number of bond defaults occurred in the first quarter of this year, which also hit the pure debt fund to some extent.