Mini Scale, Abnormal Yield Surge: What Happened to Huatai Pinebridge Hengli Short-Term Bond D? | Fund Market Chaos Tracking ⑥

Interface News Reporter | Du Meng

“Received 82 eggs in one day (a daily return of 0.82%)!” “Buying is free, holding for 30 days without redemption fees—it’s basically a short-term bond chosen by heaven!” Since March, Huatai Baoxing Hengli Medium-Short Term Bond D, which had a scale of only 30,500 yuan at the end of last year, has become a popular product among bond fund investors.

On January 14, the sales service fee for this fund’s D shares was reduced from 0.2% per year to 0.01% per year. Additionally, the fund D shares have gradually added 31 distribution channels and conducted large-scale red envelope marketing through third-party distribution channels, such as instant discounts of 1 yuan on purchases of 10.88 yuan, and 5 yuan off on 5,000 yuan investments, encouraging more investors to subscribe actively.

In terms of performance, the D shares have achieved a return of 2.84% so far this year, while the A/C shares of the same product only returned 0.44% during the same period. Why is there such a large difference? Why is the fund company aggressively marketing a fund with only 30,500 yuan in scale?

Wind data shows that as of March 12, Huatai Baoxing Hengli Medium-Short Term Bond D has a year-to-date return of 2.84%, ranking first among 970 similar medium-short term bond funds. On Tiantian Fund’s “Hot Fund Return List,” it ranks 15th. On March 2 alone, the fund’s return reached 0.82%.

Meanwhile, the A/C shares of the fund only yielded 0.44%.

Interface News contacted Huatai Baoxing Fund, and the customer service team explained, “Different shares of the same fund are operated uniformly, but due to differences in fee structures, the yields of different shares can vary.”

The last quarterly report showed that by the end of last year, the scales of Huatai Baoxing Hengli Medium-Short Term Bond A/C/D shares were 423 million yuan, 355 million yuan, and 30,500 yuan respectively. From the changes in shares in the last quarter, A shares were redeemed by 258 million shares, C shares saw net subscriptions of 60 million shares, and D shares had only 10.82 shares at the end of Q3 last year, but in Q4, nearly 30,000 shares were net subscribed.

The mid-year report last year indicated that institutional holdings accounted for 99.85% of A shares and 96.18% of C shares, while D shares were 100% held by individual investors.

How can a tiny bond fund with only 30,500 yuan in scale boost its short-term returns?

This relates to the redemption fee structure set by the fund. The subscription and redemption fee rates show that the D shares have no fee at subscription, with an annual management fee of 0.3%, a custody fee of 0.05% per year, and a sales service fee of 0.01% per year. If held for less than 7 days, a 1.5% redemption fee is charged; if held for 7 to less than 30 days, a 0.5% fee applies. After holding for 30 days or more, no redemption fee is charged.

According to the current “Administrative Measures for the Operation of Publicly Offered Securities Investment Funds,” redemption fees must be included in the fund’s assets to compensate for transaction costs and impacts caused by short-term redemptions.

“Although the fund is small, frequent redemptions within 7 days incur a punitive redemption fee of up to 1.5%, which is added to the fund’s assets. For small-scale funds, this can artificially inflate the net asset value,” said a fund industry analyst. “As the net asset value rises, many retail investors follow suit and buy in, easily expanding the scale.”

This “performance-driven ranking” approach to attract large subscription volumes and increase scale may explain the “mystery” of Huatai Baoxing Hengli Medium-Short Term Bond D’s returns.

“This isn’t new—using frequent redemptions to generate redemption fees and boost net value,” a leading public fund with a focus on fixed income told Interface News. “This kind of operation exploits loopholes in the rules; it’s not illegal but unreasonable. For companies with strict internal audits like ours, it’s not something we can do.”

Interface News learned that Huatai Baoxing Hengli Medium-Short Term Bond D was established in September 2024, distributed by Sina Cangshi Fund Sales, and is an internet channel product. Since March, the fund has announced adding 31 institutions—including Du Xiaoman, Snowball, Bosera Wealth, Dalian Online Gold, East Money, and PPM— as new distribution channels.

Additionally, Huatai Baoxing Hengli Medium-Short Term Bond D has offered “full amount instant discounts” in some channels. Investors have posted screenshots of purchases with “10 yuan minus 1 yuan” discounts, saying, “Recently, the stock market has been volatile, so I came to this bond fund to hide out. I didn’t expect this fund to have such strong returns, and there are even red envelope discounts for subscriptions.”

Public information shows that Huatai Baoxing Fund was established in July 2016, founded and controlled by Huatai Insurance. Huatai Insurance holds 85% of the shares, with the remaining 15% held by senior management and core business staff through equity incentive platforms.

Historically, by Q2 2025, the company’s public fund assets reached a record high of 67.707 billion yuan. Due to market fluctuations, by the end of last year, the total public fund assets shrank to 64.265 billion yuan.

In terms of product types, the company’s business layout shows clear weaknesses. By the end of last year, bond funds totaled 53.215 billion yuan, accounting for 82.8% of the company’s total assets. Money market funds were 7.191 billion yuan, and hybrid funds amounted to 3.002 billion yuan.