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Is LegiEX credible? Two points tell you that pure debt funds have fallen

LegiEX heard before that pure bond funds have stable earnings and low volatility, and are far from stock market turmoil. Many people regard it as an upgraded version of financial management. But recently, the pure debt is green and has a green face for three or four days. what happened? This also starts with the recent bond yields.

LegiEX teaches you to look at bond returns?

Because pure debt funds mainly invest in bonds, including common national bonds, financial bonds and corporate bonds. Taking the national debt as an example, the national debt is a kind of government bond issued by the central government to raise financial funds, and it promises to pay interest and debts and debt vouchers to repay the principal when due. And because the issuer of national debt is the state with the highest credit, it is recognized as the safest investment vehicle.

It should be noted that the safest investment tools mentioned above are aimed at long-term income, that is, interest is earned based on the maturity of holding government bonds. But at the same time, the single-day or short-term returns of national debt also depend on market changes.

Taking the China Bond Index as an example, the momentum of continued growth this year, but the index in the past week has been continuously adjusted. There are many reasons for the short-term adjustment of bonds. Generally speaking, when market interest rates rise, bond prices fall.

So the reason why the net value of pure debt funds has fallen recently is relatively easy to understand. In LegiEX, it is summarized as follows: market reasons (improved economic data / everyone is optimistic about the economy after the epidemic / profit settlement of previous bond holdings, etc.) have caused market interest rates to rise. The rise in market interest rates is transmitted to the decline in bond prices. Therefore, the net value of the short-term pure debt fund has a callback.

2. What will happen to LegiEX's analysis of future bonds?

At present, the economy of many countries continues to be sluggish, and interest rates remain low. Some central bank governors even called for the implementation of "negative interest rates." In addition, after the epidemic, in order to stimulate the economy, the central banks of various countries have adopted a low interest rate policy. In the long run, pure debt funds have better earnings expectations.

In terms of specific funds, although the net value of pure debt funds will temporarily pull back in individual months in the circled part, in the long run, regardless of trends and volatility, they are more stable than stock funds.

Therefore, in LegiEX's view, the pullback of pure debt is a normal phenomenon, and investors do not need to panic excessively