Youth's "Lie Flat" Plan: New Trend in Steady Investment
As time progresses and environments evolve, people's understanding of work and life is subtly changing.
The once "unreachable hometown" is no longer distant, and the "alien place that cannot be integrated into" has become a temporary stop.
"Escaping from the first-tier cities," "living on interest," and "raising funds to lay eggs" have become popular terms among middle-aged and young people.
Through these hot words, we can see the transformation of current attitudes towards life and financial concepts.
The impulse to pursue high returns with ups and downs in previous years has gradually faded.
In the environment of declining interest rates and conservative consumption, stability has become a crucial existence and the goal pursued by more investors.
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Hot Word 1: "Escaping from the First-Tier Cities" The first-tier cities of Beijing, Shanghai, Guangzhou, and Shenzhen were once the dream destinations for many college graduates.
From the towering CBDs, bustling streets, and brightly lit nights to the leading high-quality resources, a wide variety of showcases, and diverse performances, they all attract enthusiastic young people.
More job opportunities and higher salaries also mean fiercer competition and heavier living costs.
When survival replaces life, the idea of escaping arises.
The term "escaping from the first-tier cities" is not new, and as early as 2010, it was rated as one of the top ten real estate buzzwords of the year by the media.
However, data shows that the trend has become more apparent in recent years.
For example, the population growth of the first-tier cities, especially Beijing and Shanghai, has slowed down for several years, and even experienced negative growth at one point.
Meanwhile, the population growth of new first-tier cities such as Chengdu, Hangzhou, Nanjing, and Changsha is significant, with a significant increase in growth rate since 2016 and 2017, and the city construction is becoming more and more perfect, and the heat is continuously rising.
In addition to new first-tier cities, provincial capital cities, and second and third-tier cities have also attracted college graduates and middle-aged and young people to settle down by providing settlement preferential policies and employment and housing subsidies.
Leaving the big cities also means being closer to home.
In the "Chinese People's Return to Hometown Observation White Paper" jointly released by Tianhong Fund and NetEase Data, a national survey of 18 sample universities showed that from 2018 to 2021, college students' most desired employment locations were still second-tier provincial capital cities or non-provincial capital cities, followed by first-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen.
The total proportion of the two is more than 70%, but this proportion is slowly declining.
On the contrary, the proportion of college students who want to work in third and fourth-tier cities, small counties, grassroots towns, and rural areas has shown an upward trend, from 10.78% of the 2018 class to 17.17% of the 2021 class.
Source of the picture: Tianhong Fund "Chinese People's Return to Hometown Observation White Paper" "Escaping" and "returning" are personal choices.
Big cities are no longer the only solution.
More and more people take the "cost-effectiveness" between work and life as the primary consideration, and many people choose to return to the county after working for a period of time.
Data from the "Chinese People's Return to Hometown Observation White Paper" shows that 21.9% of the respondents dare not consider returning to their hometown without saving 510,000 yuan; 57.1% of the respondents also said that "checking savings and assets and making financial plans" is a necessary preparation before returning to their hometown.
With more flexible work patterns and more diverse income methods, more and more young people and families choose to use some savings for investment and financial management, which leads to the next buzzword.
Hot Word 2: "Living on Interest" The new trend is hard to exchange for a small but certain happiness.
"Saving a certain amount of money for retirement and living on interest" is a concept similar to financial freedom, which originated from the F.I.R.E.
(Financial independence retire early) movement in the United States.
Living on interest means covering part of the living expenses with the income earned from investment and financial management, which means that every day spent may be "free".
As early as 2018, the Douban group "Living on Interest" was established, and it has gathered 637,000 group members so far.
On Xiaohongshu, the topic related to "Living on Interest" has reached 220 million views, and related challenges have been launched, with many users sharing their experiences every day.
Data from the "Chinese People's Return to Hometown Observation White Paper" released by Tianhong Fund shows that 53.7% of the people returning to their hometown and 49.2% of those who do not return to their hometown pursue "living on interest", which is quite surprising.
However, even so, there are still considerable difficulties in implementing living on interest, that is, how to use savings reasonably to bring continuous, stable, and considerable returns to maintain a balance of income and expenditure.
Taking the F.I.R.E.
movement as an example, you need to save 25 times the annual living expenses to rely on financial management and other passive income to live the retirement life you want in advance.
Data from the "Chinese People's Return to Hometown Observation White Paper" shows that 35% of the respondents need a financial income of 30,000-50,000 yuan per year to balance the expenditure, and most of the respondents have a net asset level of less than 500,000 yuan, which means that even if you invest 200,000 yuan, you also need to achieve a 15%-25% annual return rate, which is almost impossible to achieve in the long term.
Source of the picture: Tianhong Fund "Chinese People's Return to Hometown Observation White Paper" According to the "Life Endurance Calculator" developed by Tianhong Fund, with a deposit of 500,000 yuan, an investment amount of 200,000 yuan, and an annual income of 50,000 yuan (continuing to work for 25 years), assuming an annualized return rate of 3%, at an inflation rate of 2.12%, when the annual consumption is 30,000 yuan, 50,000 yuan, and 80,000 yuan, the 500,000 yuan deposit will be spent in the 46th, 30th, and 14th year, respectively.
Source of the picture: Tianhong Fund "Chinese People's Return to Hometown Observation White Paper" In the context of continuously declining interest rates, it is difficult to find fixed deposits with an interest rate of more than 3% in 2024, and many banks have also canceled large-amount certificates of deposit.
The 7-day annualized return of money funds has long entered the 1 era.
Deposits and money funds are difficult to meet the growing investment needs.
Among the respondents in the "Chinese People's Return to Hometown Observation White Paper", 56.6% of the people returning to their hometown can achieve an annualized return rate of less than 3%.
In this case, living on interest is to a certain extent equal to eating the mountain empty, falling into an embarrassing situation of "lying down and not lying down, rolling and not rolling".
Source of the picture: Tianhong Fund "Chinese People's Return to Hometown Observation White Paper" How to achieve "effective lying down" and obtain stable and upward returns has become the key.
Hot Word 3: "Raising Funds to Lay Eggs" The popularization of investment in the form of web celebrities is a hot word at present, which can also be said to be a non-standard investment method.
In the context of the network, the income is compared to "eggs", one thousandth of the income is an egg, and the investor is the "egg collector", the more eggs collected also means the higher the income.
Of course, if the decline is called "broken eggs, broken eggs", and the income is quite high, it is called "egg king".
Daily record of the income of funds is similar to the process of "checking eggs" every day, and it is unknown how many eggs can be received or whether eggs can be received, which has a mysterious sense of happiness.
It is precisely the pursuit of a small sense of happiness that the investment method of "raising funds and collecting eggs" chooses products with small net value fluctuations and relatively stable historical returns, mainly bond funds.
Currently, there are countless "egg collectors" sharing the "egg laying" of raising funds on social media such as Xiaohongshu, recording daily, and harvesting interactions and comments.
It is precisely this web celebrity investment method, or the determination of investors to pursue stability, that has led to a rapid increase in the scale of bond funds.
Wind data shows that bond funds were the fund type with the "first number of issuance and the first scale of issuance" in 2022 and 2023.
Data from the China Securities Investment Fund Industry Association shows that as of the end of July 2024, the number of bond funds increased by 209 to 2,515 compared to the end of 2023; the net value scale was 700.591 billion yuan, a significant increase from 531.509 billion yuan at the end of 2023.
In a "Conservative Investment User Survey Report" released by Tianhong Fund this year, which was directed at 685 pure bond fund investors, the goal of conservative financial management for investors is more to "run faster than inflation and not depreciate funds", followed by the expectation of increasing income sources.
Moreover, 3% is the threshold value of the expected return rate, and the attractiveness of 4% is significantly increased, while when it exceeds 5%, investors will worry about the decline.
Source of the picture: Tianhong Fund "Chinese People's Return to Hometown Observation White Paper" In short, more and more investors pursue "excess returns in stability", but the market is unpredictable.
Even if public bond funds fluctuate significantly less than active equity products, it is still a big test for public fund managers to achieve the return targets in the minds of investors.
Data from the "Chinese People's Return to Hometown Observation White Paper" shows that more than 23% of the people returning to their hometown have obtained a 3% return through financial management.
If you are willing to bear higher risks to pursue more return opportunities, you can consider looking at high-quality medium and long-term bond funds.
For example, Tianhong Xinli has a year-on-year increase of 4.74% (fund semi-annual report data, as of 2024.6.30), and has been making a positive return every year since its establishment.
The strategy style of Tianhong Hongli, a medium and long-term bond with a more active attitude, even reached a year-on-year increase of 7.51% (fund semi-annual report data, as of 2024.6.30).
Of course, the so-called "raising funds and collecting eggs" and pursuing excess returns in stability all have their own ways.
First of all, it is necessary to choose a fund factory with sufficient experience and scale.
According to the latest scale statistics disclosed in the public fund announcements, as of June 30, 2024, the scale of bond funds of Yifangda Fund, Bosera Fund, Guangfa Fund, and China Merchants Fund exceeded 40 billion yuan, and the scale of Harvest Fund and Fuguo Fund exceeded 30 billion yuan.
The gap between the top 10 fund companies with a scale of more than 20 billion yuan is not obvious.Here is the translation of the provided text into English: However, when considering returns, the rankings may change to some extent.
According to the scale ranking of Haitong Securities for the past year's average scale of actively managed fixed income, fund companies are sorted from largest to smallest based on their scale.
Companies whose cumulative actively managed fixed income scale accounts for 50% of the total market's actively managed fixed income are classified as large companies.
Among the performance rankings of the top 17 fixed income manufacturers defined by this rule, as of the end of June 2024, Tianhong Fund ranked 1/17 in the past 7 years, 2/17 in the past 5 years, and 9/17 in the past 3 years.
In a research report by Shanghai Securities, Tianhong Fund's return level and risk control ability were further refined over a three-year period.
The data shows that, as of the end of the first quarter of this year, Tianhong Fund's long-term pure debt funds and short-term pure debt funds that have been established for more than 3 years have both outperformed the average of their peers in terms of yield over the past 3 years, and have also controlled the maximum drawdown lower than the average of their peers; in terms of controlling the risk of product volatility, the short-term pure debt funds are significantly lower than the average of their peers, while the long-term pure debt funds are slightly higher than the average of their peers.
Further shortening the timeline, Wind data shows that as of September 9, 2024, the average maximum drawdown of all short-term debt products (Wind classification) under Tianhong Fund since the beginning of the year is 0.11%, lower than the average maximum drawdown of all short-term debt products in the market at 0.17%; the average maximum drawdown of all medium to long-term debt products under Tianhong Fund this year is 0.46%, slightly higher than the average maximum drawdown of all medium to long-term debt products in the market at 0.39%.
From the above data, there is no absolute king in the field of public bond funds.
Even established fixed income giants such as Yifangda, Nanfang, and Bosi need to face complex variables in the precise competition and contention of returns to the nearest 0.01%.
However, it is worth noting that the proportion of individual investors participating in bond funds is continuously increasing, reaching an average holding ratio of 47.82% by the end of the second quarter of 2024.
With the increasing popularity and even internet celebrity status of bond funds, some individual investors hope to use short-term pure debt funds to replace money market funds in exchange for higher stable returns, and these investors value convenience in subscription while pursuing stability.
To some extent, bond funds have entered the retail era, which is exactly where Tianhong Fund's advantage lies.
The 2024 semi-annual fund report data shows that Tianhong Fund has 5.5 million holders of pure debt funds, ranking first in the industry.
Among short-term pure debt funds, the proportion of individual investors in Tianhong Fund has always been high.
Combined with the data at the end of the second quarter of 2024, the holding ratio of individual investors in several short-term pure debt products is close to 100%, indicating a high level of trust in Tianhong Fund.
This is inseparable from Tianhong Fund's long-term focus on serving individual investors, which has formed a deep customer accumulation and guidance on the liability side.
In the context of a bullish bond market, fund manager Ren Ming once said, "In addition to managing the net value curve, starting from the interests of the holders, some management on the liability side is necessary, such as when hot money pours in, having the courage to limit purchases and block hot money, which comes easily and leaves quickly.
Doing more on the liability side can prevent this from intensifying."
In terms of investor services, Tianhong Fund has developed a mini-program for bank channels called "Hongyun Dangtou", presenting a "bond market barometer" and a series of fixed income investment education content, passing on the knowledge of bond fund investment to customers through bank financial managers.
At the same time, a series of investment education content has been released in conjunction with market fluctuations, popularizing the characteristics of bond market fluctuations and bond fund categories.
In the retail era of bond funds, in order to adhere to the "stable" positioning and better control drawdowns, Tianhong Fund's fixed income team operates in a professional division and collective combat mode.
Based on the "Tianhong Five Cycles" bond investment framework proposed in 2020, which combines macro and trading schools, and using highly quantitative investment models, a scientific approach is adopted to comprehensively analyze the bond market to achieve investment research capabilities beyond the market average.
The Tianhong Five Cycles have been continuously optimized in investment practice and have helped Tianhong Fund's fixed income team to take a long position in the bond market in the first half of 2021, to look ahead and avoid the bond market correction in the second half of 2022, and to firmly take a long position in 30-year government bonds in the first quarter of 2024.
Looking at the past results, there is both sensitivity to avoid risks in advance and insight into grasping the timing of trading opportunities.