In a volatile market, the key is balancing defense and offense to achieve steady progress—this may be the most reassuring quality to hold during turbulent times. In recent years, investors' perception of returns has shifted from "how much was earned" to "was it earned comfortably," placing greater emphasis on risk-adjusted returns. During the first half of the year's one-sided rally, high-beta assets performed strongly, fully releasing upward momentum and becoming a significant source of returns for many investors, which sparked FOMO (fear of missing out) in the market. However, as the market entered a consolidation phase with increasing volatility, many investors have turned to JOMO (joy of missing out). This shift does not reflect a bearish outlook but rather a preference for comfort and control in the investment process. Against this backdrop, low-volatility fixed-income plus funds are gradually gaining attention. These products feature smooth long-term annualized net value curves and small drawdowns; they may not stand out in bull markets but are resilient during downturns. Among them, the Ping An Tian Li Bond Securities Investment Fund (hereinafter referred to as Ping An Tian Li), a first-grade bond fund established 14 years ago and tested through multiple market cycles, does not directly invest in stocks and demonstrates resilience and staying power with its excellent risk-return performance.

Excellence in both short and long races

Amid heightened market volatility in 2026, Ping An Tian Li has showcased outstanding "steady progress" capabilities, achieving a one-year return of 3.25%, surpassing its performance benchmark of 1.30% by 1.95 percentage points. Notably, while generating excess returns, the product has maintained excellent drawdown control. Wind data shows that as of June 30, 2026, Ping An Tian Li's maximum drawdown over the past year was only 0.48%, significantly lower than the benchmark's 0.91%, with a recovery period of 17 days. Over a longer time horizon, Ping An Tian Li's "long-distance strength" is also robust. As of August 10, 2026, since its inception, the product has achieved a return of 99.33% (versus the benchmark's 83.47%). On an annual basis from 2023 to 2025, the product's returns were 6.17%, 5.18%, and 3.25% (benchmarks: 5.23%, 8.82%, and 1.41% respectively), with all three years' maximum drawdowns controlled within 1.3%.

The philosophy of combining offense and defense

Howard Marks, co-founder of Oaktree Capital, once noted that defense is core to good investing, but purely defensive investing is not good enough; offense is key to excess returns, but purely offensive strategies are unsustainable. Ping An Tian Li embodies this philosophy—it is clearly positioned as a low-volatility fixed-income plus product. From a strategy perspective, Ping An Tian Li's holdings are primarily bonds, with no stock investments, and convertible bonds are held in a low, dynamically adjusted proportion. According to fund periodic reports, at the end of the second quarter of 2026, convertible bonds accounted for 3.81% of the fund's net asset value. Over a longer period, from 2023 to 2025, the proportion of convertible bonds' fair value to net asset value was 6.29%, 8.97%, and 9.64% respectively. For defense, credit bonds serve as the base, building a low-volatility anchor. The latest second-quarter report (as of June 30, 2026) shows that most of Ping An Tian Li's positions are in credit bonds, meaning its returns primarily come from coupon income, with naturally lower volatility compared to funds holding large equity stakes, making it suitable for conservative investors. Additionally, fund manager Ms. Zeng Xiaoli notes that Ping An Tian Li is managed through mechanisms like "enhanced position constraints and individual security risk diversification." This includes using fixed-income assets as a base, incorporating both pure bond risks and convertible bond exposures into risk budget management, and diversifying convertible bond holdings by considering price, conversion premium, and fundamentals to reduce the impact of individual securities on net value. For offense, a small position in convertible bonds provides flexible enhancement. Above the stable base, Ping An Tian Li uses a central position of about 5% in convertible bonds for moderate enhancement, achieving "defense with offense." Convertible bonds have also shown good upward elasticity this year. Wind data indicates that all 36 new convertible bonds issued this year have not broken their issuance price, with an average gain of over 50%, and 24 of them hit the first-day ceiling of 57.3%. In her quarterly report, Ms. Zeng also noted that the strategy focuses on balanced convertible bonds, moderately participates in equity-linked convertible bonds in AI-related sectors for swing trading, and retains some high-grade, debt-like convertible bonds as a defensive base.

A new opportunity for allocation

The well-balanced strategy stems from the manager's deep experience. Fund manager Ms. Zeng Xiaoli holds a master's degree in finance from Renmin University of China, with over eight years of fund management experience. Her career spans major credit rating agencies and public funds, where she held roles including credit analyst, head of fixed-income research, and fund manager. She consistently adheres to the principle of "research creates value," emphasizing diversification and strict drawdown control, earning investor trust. Ms. Zeng believes that the investment appeal of fixed-income plus products is likely to persist in the second half of the year, with a moderately strong bond market expected and convertible bonds focusing on structural opportunities. For pure bonds, she argues that fundamentals continue to support the bond market in the medium term, with a moderate pace of economic recovery, weak real-sector financing demand, and accommodative monetary policy all favorable. Temporary disruptions from government bond supply, inflation expectations, and equity risk appetite recovery in the second half may occur, but amid strong allocation demand and stable liquidity, the yield curve's midpoint may still decline. The strategy prioritizes high-grade assets with good liquidity and acceptable coupons, waiting for better allocation points from liquidity or supply disturbances. For convertible bonds, Ms. Zeng points out that supply-demand imbalances may persist, with valuations potentially oscillating at high levels. Recently, convertible bonds have shown notable resilience compared to underlying stocks, but at the cost of valuations returning to historically high levels, making right-side trading more cost-effective. The overall convertible bond market faces a contradiction of high probability but low payoff, with opportunities in sectors like general AI and resource cycles. The allocation leans toward balanced distribution across three main themes: technology growth areas such as AI hardware and semiconductor equipment/materials; high-end manufacturing plus cyclical resources/chemicals; and high-dividend defensive sectors like banks and utilities. Risk note: Fund performance and convertible bond position data are from fund periodic reports and Wind, verified by the custodian. The Ping An Tian Li Bond Securities Investment Fund (Class A) was established on November 27, 2012, with a benchmark of 800% of the ChinaBond Preferred Investment-Grade Credit Bond Index return plus 10% of the bank demand deposit rate (after tax) and 10% of the CSI Convertible Bond Index return. Past performance does not indicate future results. Investment involves risks, including potential loss of principal. Investors should read the fund contract and prospectus carefully before investing.