Full name of the fund: Guotai Li Xiang short-term debt bond securities investment fund; Fund abbreviation: Guotai Li Xiang short-term bond C; Fund code: 006598 (front end); Fund type: bond-short-term debt.

1. The Fund invests in financial instruments with good liquidity, including bonds (including government bonds, local government bonds, central bank bills, financial bonds, government-supported institutional bonds, corporate bonds, medium-term notes, short-term financing bonds, ultra-short-term financing bonds, publicly issued subordinated bonds, private debts of small and medium-sized enterprises, and convertible bonds that can be traded separately), asset-backed securities and bond repurchase. The Fund does not invest in stocks, warrants and other assets, nor does it invest in convertible bonds (except the pure debt part of convertible bonds that can be traded separately) or exchangeable bonds.

2. Investment strategy: In bond investment, the Fund will flexibly use various investment strategies, such as duration strategy, generic allocation strategy, interest rate variety strategy, credit bond strategy, asset-backed securities investment strategy, and SME private debt investment strategy. Based on the grasp of the economic cycle and market environment, we will deeply analyze the fiscal policy and monetary policy, keep track of the macro-economy and make a dynamic bond portfolio. 1. Duration strategy The Fund mainly invests in short-and medium-term bonds, that is, bond assets with a remaining maturity of no more than three years. Based on the analysis of macroeconomic policies, the Fund will actively predict the future interest rate trend and adjust the duration allocation of bond portfolio, so as to improve the bond portfolio income and reduce the interest rate risk of bond portfolio. When the market interest rate level is expected to rise, the Fund will appropriately reduce the duration of the portfolio; When the market interest rate is expected to fall, the duration of the portfolio will increase appropriately. In the process of determining the duration of bond portfolio, the Fund will determine the optimal duration of bond portfolio on the basis of judging the fluctuation trend of market interest rate, according to the form of current bond market yield curve, and through scenario analysis and stress test under reasonable assumptions. 2. Generic allocation strategy The Fund analyzes credit risk, tax burden level, market liquidity, market risk and other factors of different types of bonds, studies the spreads and their changing trends of investment varieties in the national debt, financial bonds, corporate bonds, exchanges and interbank markets in the same period, formulates bond generic allocation strategies, and obtains investment income brought by changes in spreads between different bond types.