As the year draws to a close, the market for bond funds continues to resonate strongly, reflecting a significant trend within the investment communityRecent reports indicate that in December alone, bonds accounted for a stunning 86.58% of new fund issuance, marking the highest level recorded this yearThe sheer volume of new bond funds launched is noteworthy, with a total of 20 funds surpassing 2 billion yuan in initial fundraisingEven more striking are those that reached the maximum allowable fundraising cap of 8 billion yuan, showcasing robust demand and investor confidence in bond products.

This burgeoning interest in bond funds occurs against the backdrop of a general cooling in the market for new fund establishmentsThroughout the year, more than 70% of newly issued funds were bonds, cementing their status as the dominant force in fund launchesNotably, types of bond funds linked to interest rates and policy-related finance bonds have captured considerable attention, with the average issuance sizes climbing to more than 3 billion yuanThis highlights the appetite among investors for safer, income-generating options amidst a turbulent economic environment.

As 2024 approaches, several public fund companies foresee a bond market trajectory similar to that of 2023. Many predict a bumpy landscape in the bond market, underlining the importance of seizing opportunities during periods of declining yieldThis foresight is vital for investors looking to enhance their returns amidst economic fluctuations.

The emergence of "super-sized" bond funds is becoming a recurrent themeFor instance, on December 23, Oriental Red Asset Management announced the establishment of its 0-3 year policy financial bond fund, raising an impressive 2.2 billion yuan from 248 subscriptions

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Earlier, Hua'an Fund reported a similar success, with its own 0-3 year policy financial bond fund meeting the maximum fundraising goal of 8 billion yuan, achieving 225 subscriptions.

This trend is not just isolated to a few prominent playersRecent months have seen a dramatic uptick in bond fund launches, and the figures are staggeringAccording to Wind data, more than 30 bond funds have been successfully launched since December, amassing a total issuance of over 120 billion yuanThis translates to an average issuance of around 31.56 billion yuan per fund, setting a monthly high for the year.

Further highlighting the demand, several funds recently opted to close subscriptions earlyFor example, the Oriental Red policy financial bond fund originally scheduled to accept subscriptions until December 28 concluded its offering early on December 20. Similarly, Hua'an's policy financial bond fund also announced an early closure on December 17, further illustrating the strong demand.

The experience of various funds underscores the rapid pace of investor participationThe time taken to achieve successful subscription results is astounding, with several bond funds, including Silver Hua Zhi Chun and Minsheng Jia Yin, having their subscription periods last no more than five days.

This year, the trends in new fund issuance show that bond funds have taken a significant leadSpecifically, the proportion of newly established bond funds in December accounted for the bulk of new fund issuances, with about 20 bond funds exceeding the 2 billion yuan threshold.

In addition to Hua'an's policy financial bond fund, other heavyweights like Penghua Fengjing, GF Zhongzhai policy financial bond, and Bosera Jin Yuan rate bond have also generated close to 8 billion yuan, crowning them as the "giants" of recent new fund launches

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Furthermore, several other offerings exceeded the threshold of 5 billion yuan, showcasing a competitive and vibrant market.

As bond funds shine in a year where equity funds faced significant challenges, they have become the backbone of new fund offeringsAccording to statistics, as of December 23, over 1,200 funds have emerged this year, with initial fundraising amounts totaling about 1.1 trillion yuanNotably, bond funds contributed to over 780 billion yuan in initial fundraising, which represents a staggering 70.9% of the total.

Industry analysts have pointed to the thriving bond marketThey believe it is largely driven by the solid performance of bonds this year and also the end-of-year rush by fund companies to launch products aimed at achieving substantial fundraising goalsBond funds, which pose lower risks compared to equity funds yet promise higher returns than money market funds, naturally become the preferred choice for investors.

Examining the details, the bond fund landscape shows a pronounced preference for interest rate bonds and policy financial bondsReports indicate that new interest rate bond products have averaged over 3 billion in issuance, while policy financial bond products have clocked in at over 5 billion, accounting for many of the breakout funds this year.

Additionally, even as popular bond funds gain traction, numerous new products are on their wayAs of December 23, there are over 20 new bond funds currently in the issuance pipeline, with products such as Agricultural Bank of China’s Ru Yi one-year holding A and China Merchants' An Kang A awaiting their turn to enter the market.

Overall, analysts project that the bond market will maintain a generally oscillating nature

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Throughout this year, while the A-share market struggled with fluctuations, the bond market has shown exceptional performance, with nearly 90% of bond funds returning positive yields.

With 2023 nearing its conclusion, many fund companies have begun to hold annual strategy meetings to discuss their forecasts for macroeconomic conditions and bond market movements in 2024. Insights shared during these meetings indicate a consensus expectation that the focus will largely remain on stability, with a tempered outlook on strong stimulus measures for the coming year.

Fund managers have noted that post the Central Economic Work Conference, bond market sentiments lean towards maintaining stabilityThe anticipation for a robust stimulus has weakened, and bond yields saw a marked decrease from their previously elevated positions.

As for the outlook on the bond market for next year, experts suggest that while there remains little risk of substantially waning economic growth, the potential for upward economic movement may be limitedThis implies a favorable risk profile for the bond market moving forwardFurthermore, as long as economic stability remains elusive, interest rate cuts or reserve requirement reductions will be crucial fiscal strategies, which could further lower bond yields.

In the eyes of several fund managers, such as Zhao Guoying from Jiashi Fund, the outlook for 2024 reflects an unchanged macro backdrop, leading to an enduring transformation in the economyThe characteristics of the bond market are anticipated to be defined by "low interest rates and low volatility" as the primary phenomena.

Meanwhile, the team from Jinyuan Shun’an Fund believes that bond yields are likely to show a steady, oscillating strength

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