GUANGZHOU (Fund China) – It is really an “air attack” as a continuous three days big sell-off occurred since Jan. 15 in the New Year. Some insiders indicated that 2008 investment market will be more fluctuant and the investment risk will be heightened further due to the China tight macro regulation to the 2008 investment market. In order to evade the market risk some low risk financing varieties like bond funds are expected to receive their bloom ultimately.

“It is a strategic move to deal with the excess liquidity and resolve the potential financing risk for increasing the direct financing proportion at present.” SuFeng, the galaxy income fund manager and the director of Galaxy fixed-income fund said, “and the supply potential of the direct financing market is great. The demand though was constrained in the short term, is noticeable as the reversing condition has appeared.

Another views from LuWenLei, the China Universal Enhanced income bond fund manager saying that bond funds should be located fundamentally into the asset portfolio so as to protect the past two years’ earning and improve the investment portfolio in the a-little-big fluctuant market at present. It is to say that China Universal enhanced income bond fund sets up a particular redemption fee threshold in the transaction so as to prevent from a short term malicious arbitrage. And this sort of measures would will significantly reduce the lost from arbitrage for the long term holders.

Copyright Fund China 2009.

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