"Penghua Local Debt ETF Twin Stars": Featuring diverse duration characteristics to meet various needs for cash management and swing trading

In the current wave of bond index investing sweeping the fixed income market, tools that combine clear risk-return profiles with liquidity are increasingly becoming the “new favorites” for investors’ asset allocation. As a representative of this trend, local government bond ETFs, with their unique credit backing and trading convenience, have emerged as a standout in the bond ETF segment, gradually becoming an important core holding for investors.

On-Exchange Cash Management Tool: Penghua 0-4 Year Local Bond ETF Becomes the Largest Local Bond ETF by Market Size

According to Wind data, as of March 13, 2026, among the only four local bond ETFs in the market, two products created by Penghua Fund’s cash investment division account for half of the market. Notably, the Penghua 0-4 Year Local Bond ETF (159816.SZ) has a latest size of 9.602 billion yuan, making it not only Penghua Fund’s largest product in the local bond space but also the largest local bond ETF in the entire market. This reflects investors’ strong demand for quality allocation tools.

Launched in July 2020, the Penghua 0-4 Year Local Bond ETF primarily tracks the CSI Local Government Bond Index with a 0-4 year maturity. As the only short-duration local bond product in the market, it is positioned as an “on-exchange cash management tool,” with T+0 trading, pledgeable financing, and leverage options. It fills a gap in short-term on-exchange funds, offering investors a safe, liquid, and yield-oriented allocation choice.

In the current low-interest-rate environment, traditional active bond funds face increasing difficulty in generating excess returns, leading investors to seek transparent holdings, diversified risks, and highly liquid tools. The Penghua 0-4 Year Local Bond ETF, with its “low volatility, high liquidity, and stable income” advantages, has become a “safe harbor” for on-exchange funds.

Beyond its leading size, the long-term performance and operational capability of the Penghua 0-4 Year Local Bond ETF have also been recognized by authoritative ratings. According to periodic fund reports, since its inception in 2020, it has achieved positive net value growth for five consecutive years, with drawdowns comparable to the 0-3 Year China Development Bank ETF. With consistent stable returns and strict risk controls, it has been rated five stars / AAAA by Tianxiang Investment Advisory and Ji’an Jinxin for three and five-year periods (as of the end of 2025). This indicates that over a five-year cycle, the fund has outperformed most peers in terms of returns and risk management, creating steady value for holders.

Dual Maturity Profiles: “Penghua Local Bond ETF Twin Stars” Build a Complete Allocation Matrix

It’s worth noting that Penghua’s local bond ETF strategy is not a solo effort but a “twin stars” with both long and short durations, providing investors with different maturity options:

On-exchange cash management tool: Penghua 0-4 Year Local Bond ETF (159616.SZ) focuses on short-term duration, suitable for investors with liquidity management needs seeking stable returns. It can serve as a money market enhancement tool or core holding.

Mid-term duration tool: Penghua 5-Year Local Bond ETF (159972.SZ), the market’s first 5-year local bond ETF, targets mid-term strategies, aiming to offer higher yield potential and fill a market gap for medium-term local bonds. Since its launch in 2019, it has achieved net value growth for six consecutive years. As of March 12, 2026, its size reached 4 billion yuan. It also performs well, rated five stars / A by Tianxiang Investment Advisory, and five stars / A by Ji’an Jinxin for five-year periods.

Different maturities and functions of local bond ETFs meet diverse client needs for on-exchange liquidity and yield, forming a comprehensive product line that makes Penghua the largest local bond ETF manager in the market.

Strong Allocation Value: T+0 Trading + Pledge Financing + Low Fees

For investors, Penghua’s two local bond ETFs offer multiple trading advantages, providing flexible operations difficult to achieve with ordinary bond funds.

First, both ETFs are included as collateral for repo transactions on the Shenzhen Stock Exchange. Currently, some bond ETFs can be used for pledge financing, and these two can be used for repurchase agreements under regulations, allowing investors to pledge their holdings to borrow new funds for further investment, enhancing efficiency. Ordinary bond funds only generate income.

Second, both ETFs support T+0 rollover trading. ETFs purchased or subscribed on the same day can be sold, redeemed, or pledged immediately, with funds available on the same day. Compared to off-exchange bond funds that typically take T+2 days to settle, these ETFs significantly improve capital flow efficiency, better meeting investors’ liquidity needs.

Additionally, on-exchange trading costs are advantageous. As investors’ demand for tactical trading increases, bond ETFs do not charge redemption fees, favoring active traders.

Overall, Penghua’s local bond ETFs not only meet asset allocation needs similar to traditional bond funds but also serve as flexible tools for short-term trading and intraday arbitrage, achieving a “dual function” of allocation and trading. This unique tool-like feature makes them valuable in current volatile markets for portfolio optimization.

In the vast blue ocean of bond index investing, Penghua 0-4 Year Local Bond ETF, with over 9.6 billion yuan in assets, sets a benchmark in the industry. It showcases Penghua Fund’s meticulous management and forward-looking layout, and also reflects market trust in quality, tool-based products. For conservative investors, this largest local bond ETF, combining safety, liquidity, and yield, may be an ideal “ballast” for asset allocation.

Risk warning: Funds are subject to risks; investments should be cautious.

Source: Penghua Fund