Solid research, flexible trading | China Zhongji Investment's high-yield debt team proceeds cautiously
In recent years, the Chinese economy has undergone a transition period, with a significant rise in bond defaults and a huge trading volume of discounted bonds. The distribution characteristics and convergent risk preferences of institutional investors have led to a severe imbalance in buying and selling power, thus forming a uniquely Chinese secondary high-yield bond market.
China Zhongji Investment has been involved in the high-yield bond market since 2019, weathering multiple market fluctuations and tests, and has developed a mature and effective high-yield bond strategy (the net asset values of Zhongji No. 1, Zhongji No. 2, Huixuan series, and Zengli series products managed by China Zhongji Investment can be viewed through Wind, Private Equity Paipai.com, etc.).
"Solid research, flexible trading" is the consistent principle of the investment portfolio. Credit research is fundamental; high-yield bonds demand more stringent credit analysis than pure bond strategies. The team combines in-depth research by senior credit rating personnel with model validation to grasp risk pricing; flexible trading is the team's specialty, fully exploiting market mispricing opportunities and widely utilizing irrational fluctuations caused by event shocks and market sentiment to earn excess returns. Over four years, all products have achieved good investment returns and relatively good drawdown control.
In the past two years, real estate bonds have experienced a continuous and across-the-board decline, spreading from small and medium-sized real estate companies to leading developers. During this period, the portfolio maintained a cautious approach, adhering to a low-price strategy, with the initial purchase price of most real estate bonds being below 35 yuan. Until the second half of last year, the top real estate developers faced discounted selloffs, and signs of policy warming became increasingly apparent. The team promptly adjusted its strategy for real estate bonds, actively building positions in leading developers, and seizing the right opportunity. Apart from real estate bonds, municipal bonds and industrial bonds have consistently been the mainstays of the portfolio allocation. Municipal bonds maintain diversified allocation and a profit-taking mechanism, continuously generating profits through trading. The judgment of industrial bonds requires more rigorous credit analysis and offers greater room for arbitrage, often yielding high returns in a short period, and has been a major source of profit for the portfolio in the past.
