The current macroeconomic environment is relatively complex. The uncertainty of the external economic environment remains high, and the decline in domestic economic growth has become a general consensus in the market. The volatile market situation is unlikely to change in the short term. Regarding this, Mr. Li Xiaoyu, Director of the Fixed Income Department at Changxin Fund, expressed that China has sufficient tools to adjust its monetary policy. The market environment should be able to maintain an appropriately loose and stable situation, enabling a relatively steady economy. A soft economic landing is a highly probable event. From recent policies such as the central bank's reduction in the reserve requirement ratio, liquidity will be relatively loose, which is beneficial for the bond market. If future monetary policy becomes looser than expected, there will be more space for interest rate products and credit products.
Discussing the stock market volatility, Li Xiaoyu pointed out that with the easing of policies, considering the current market environment and investors' defensive needs, convertible bond investments, which have both equity and debt characteristics, are worth attention. Convertible bonds are a type of bond with derivative conditions, possessing the flexibility of "having a bottom in bear markets and sharing in bull markets." Specifically, convertible bonds have the feature of bond protection. If it falls significantly, it would be equivalent to a pure bond, where the yield has already become apparent; simultaneously, it also possesses equity characteristics. If the market rises, apart from the value of the bond, additional gains can be obtained through stock options by converting the bonds into shares. For investors who do not want to miss out on rebound opportunities but are concerned about further declines due to economic slowdowns, their investment value stands out.