Saying Goodbye to Pure Bond Dependence! Brokerages Asset Management Collectively Shift to "Fixed Income + Multi-Strategy"

In the context of declining market interest rates, narrowing spreads on traditional credit bonds, and weakening confidence in local government bonds, the securities asset management industry is experiencing a profound transformation in investment strategies.

Recently, a survey by Securities China found that abandoning pure bond investments and fully shifting to “Fixed Income + Multi-Strategy” has become the industry’s consensus. This change is not only an optimization at the product and strategy level but also a systematic overhaul of the research system, yield structure, and risk management.

Caitong Asset Management explained that the current decline in absolute returns is a common challenge across the industry, and relying on a single asset class can no longer meet investor needs. A relevant person from Guolian Minsheng Asset Management also stated that with foundational yields in fixed income entering a low zone, both coupon and duration strategies face limitations, making it a widespread industry concern to achieve substantial absolute returns. Chen Jiabin, General Manager of Guohai Asset Management, also noted that the traditional credit deepening and reliance solely on coupon strategies have significantly narrowed the space, mainly because credit risk pricing has become more rational, high-quality credit assets are scarce, and simple spread income cannot support long-term product yields.

Under multiple pressures, restructuring income sources has become an urgent task for the industry. Upgrading from traditional “Fixed Income+” to a “Fixed Income + Multi-Strategy” system has become the core evolution direction for securities asset management firms’ fixed income foundations. Unlike the past simple addition of “Fixed Income + Equity,” this round of strategy iteration emphasizes diversification, tool-based approaches, and an all-weather strategic layout.

Caitong Asset Management is one of the early institutions to complete a systematic layout in this area. Since 2016, the company has been developing “Fixed Income + Multi-Strategy” business, and has now evolved the traditional “Fixed Income+” into a comprehensive toolkit covering convertible bonds, quantitative financial engineering, derivatives, and overseas assets. In terms of structure, besides the traditional fixed income research department and public/private fixed income investment departments, the firm’s large fixed income sector also includes an international business department and an innovation investment department. This architecture effectively reduces cumbersome cross-department communication and allows for rapid construction of a “fixed income foundation with diversified enhancement” strategy system. Additionally, the company enhances its research and trading integration and improves its interest rate bond trading capabilities to generate returns from both research and trading, gradually reducing reliance on a single coupon.

Guangzheng Asset Management has also completed the transition from single-yield fixed income to multi-yield strategies. Its overall approach has shifted from passive holding to active trading and diversified enhancement, with a stable fixed income providing the base coupon, and upper-layer strategies such as equity timing, selective convertible bonds, quantitative hedging, and options providing limited additional returns. The key is to keep volatility within a manageable range for liabilities. Guangzheng believes that the core capability of “Fixed Income+” is not simply stacking tools like equities, convertibles, or quantitative strategies, but rather the ability to allocate and rebalance major asset classes, control drawdowns, adhere to investment discipline, and coordinate multiple strategies.

“In a low-interest-rate era, the threshold for active management has not been lowered but significantly raised,” said a relevant person from Guolian Minsheng Asset Management. The company explores alternative strategies such as ABS and REITs through precise duration management and multi-asset diversification to reconstruct income sources. These directions are not about “changing tracks to win by default,” but require higher research and portfolio management capabilities.

Institutions like Guohai Asset Management, Guojin Asset Management, and Hu’an Asset Management are also advancing the implementation of “Fixed Income + Multi-Strategy.” Guojin Asset Management adopts a dual approach of “horizontal asset expansion and deepening tools vertically,” extending income sources to REITs, commodities, cross-border assets, and more, using trading strategies and derivatives for hedging to optimize portfolio performance. Chen Jiabin explained that Guohai Asset Management is shifting from an early focus on static income to “seeking dynamic income,” adding trading strategies on top of credit foundations; the firm increases convertible bond allocations to enhance yield flexibility through their “attack and defend” features, while also deploying derivatives like government bond futures to steadily advance multi-asset allocation. Hu’an Asset Management also emphasizes “strengthening fixed income + product advantages and building diversified asset strategies” as a key focus, continuously broadening investment boundaries and creating balanced, stable-yield product systems.

“In a low-interest-rate environment, the development of ‘Fixed Income+’ products and strategies across the market is rapidly evolving, constantly raising new requirements for asset management capabilities. In my view, the core of Fixed Income + and multi-asset strategies is ‘risk-budget-controlled multi-yield integration,’ essentially achieving yield enhancement through multiple strategies under strict drawdown control,” Chen Jiabin said.

Layout: Wang Lulu

Proofreading: Yang Lilin