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Daniel Ren

Across The Border | Bond funds provide scant relief for mainland investors who fled 2015 stock rout

About a third of mainland bond funds managed by fund houses have posted losses so far this year, according to Wind Information

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A stock market meltdown in the summer of 2015 sent Chinese investors clamouring to buy into bond funds. Photo: AP
Daniel Renin Shanghai

Mainland investors who sought safety in bond funds after they were burned in the stock market crash of mid-2015 may find themselves licking their wounds once more.

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As of Monday 450 bond funds – about a third of the 1,400 mutual funds focusing on fixed-interest investment – had posted losses this year, according to Shanghai-based data provider Wind Information.

The woeful performance of the funds – known normally as an investment product that generates low but stable returns – came after a frenzied buying spree last year.

The total value of bond funds under the management of the 113 mainland mutual fund houses climbed 760 billion yuan (US$110.4 billion) to 9.1 trillion yuan in 2016.

I tried to dodge volatility on the stock market, only to find volatility spread to the bond market
Yu Haipeng, investor

Their sudden popularity reflected a weaker risk appetite among investors after the key stock index slumped 43.3 per cent in less than three months from June 12, 2015 – a market rout that wiped out capitalisation of US$5 trillion.

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