--- title: "Multiple factors drive the deepening trend of indexation in the convertible bond market" type: "News" locale: "en" url: "https://longbridge.com/en/news/279501783.md" description: "Since 2026, the trend of indexation in the convertible bond market has deepened, mainly reflected in the significant growth of the convertible bond ETF market, which reached 76.667 billion yuan, a year-on-year increase of 81.56%. The imbalance in supply and demand structure is the fundamental driving force behind this trend, as market supply has significantly contracted since 2021, leading to a reduction in the supply of quality assets, and investors have gradually shifted towards standardized index products. The maturity of investors and the support of the policy environment have further promoted the development of this trend" datetime: "2026-03-17T23:10:11.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/279501783.md) - [en](https://longbridge.com/en/news/279501783.md) - [zh-HK](https://longbridge.com/zh-HK/news/279501783.md) --- # Multiple factors drive the deepening trend of indexation in the convertible bond market Since 2026, the trend of indexation in the convertible bond market has further strengthened. The core symbol of this trend is the significant growth in market size of index products represented by convertible bond exchange-traded funds (ETFs). According to Wind Information, the total scale of convertible bond ETFs listed on A-shares has reached 76.667 billion yuan this year, a year-on-year increase of 81.56%. In my view, the formation of this trend is not an isolated phenomenon; the imbalance in supply and demand structure is the fundamental driving force. Since 2021, the supply side of the A-share convertible bond market has entered a clear contraction trend. On one hand, data shows that the issuance scale of new bonds has declined from a peak of 282.846 billion yuan in 2021 to 64.823 billion yuan in 2025, indicating a clear contraction in supply. On the other hand, the market's existing scale continues to shrink due to factors such as maturity, forced redemption, and conversion, leading to a continuous decrease in investable targets. Against the backdrop of tightening supply of quality assets and a significant increase in the difficulty of actively selecting bonds, funds have gradually shifted towards standardized and diversified index products, becoming a rational choice in the market. The maturation of investors' investment habits is a direct driving force behind the indexation trend. With the continuous improvement of the domestic capital market, investors' professional literacy and investment awareness have been continuously enhanced, and investment concepts are accelerating their shift from "purely pursuing returns" to "scientific asset allocation," placing greater emphasis on the essential attributes and adaptability of investment tools. Currently, the unique advantages of convertible bond ETFs precisely meet the core demands of investors—high certainty can effectively reduce investment volatility, high efficiency facilitates quick positioning in the convertible bond market, and low costs lower the threshold for long-term investment, making them the preferred tool for investors to allocate convertible bond assets and optimize investment portfolios, further accelerating the advancement of the indexation trend. The systematic guidance of the policy environment is a key external support for strengthening the indexation trend. In January 2025, the China Securities Regulatory Commission issued the "Action Plan for Promoting the High-Quality Development of Index Investment in the Capital Market." This top-level design elevates index investment to a strategic height for the high-quality development of the capital market, not only conveying a clear regulatory direction to the market but also greatly boosting the confidence of fund managers in laying out index products and investors in accepting index tools, laying a solid policy foundation for the indexation development of the convertible bond market. More critically, the role of policy is not a single guide but provides comprehensive nourishment for the sustainable development of index investment by improving the market ecosystem and optimizing the development environment. Specifically, on the product side, the policy encourages the enrichment and innovation of index systems. In 2025, the China Securities Index Company newly released 12 industry-specific convertible bond indices, providing diverse benchmark targets for fund managers to develop segmented index products, while also better meeting the specialized and refined asset allocation needs of institutional investors. On the funding side, the policy focuses on attracting and stabilizing long-term allocation funds: on one hand, by improving the interconnection mechanism, continuously expanding the scope of ETFs included in the Shanghai-Shenzhen-Hong Kong Stock Connect, it has opened channels for foreign long-term funds to participate in the domestic convertible bond market; on the other hand, by optimizing the differentiated arrangements for bond fund redemption fees, it guides funds to establish a long-term investment concept, promoting the accelerated inflow of long-term funds such as insurance and annuities that are highly sensitive to stability, transparency, and cost, providing stable funding support for the indexation trend of the convertible bond market In summary, the wave of indexation in the convertible bond market in 2026 is not only a natural choice resulting from changes in the supply and demand structure but also an inevitable outcome of the maturity of the investor structure, and it is further a trend of the times guided by top-level policy design. At the same time, the evolution of the indexation trend in convertible bonds has not only reshaped the investment ecology of the convertible bond market, reduced market volatility, and improved allocation efficiency, but also, with its robust and transparent characteristics, provided a convenient and efficient asset allocation tool for various types of investors, contributing to an increasingly rational and mature investment atmosphere ### Related Stocks - [512000.CN](https://longbridge.com/en/quote/512000.CN.md) - [06099.HK](https://longbridge.com/en/quote/06099.HK.md) - [512880.CN](https://longbridge.com/en/quote/512880.CN.md) - [511380.CN](https://longbridge.com/en/quote/511380.CN.md) - [511180.CN](https://longbridge.com/en/quote/511180.CN.md) - [159842.CN](https://longbridge.com/en/quote/159842.CN.md) - [01776.HK](https://longbridge.com/en/quote/01776.HK.md) - [600999.CN](https://longbridge.com/en/quote/600999.CN.md) - [000776.CN](https://longbridge.com/en/quote/000776.CN.md) - [000832.CN](https://longbridge.com/en/quote/000832.CN.md) ## Related News & Research - [GF Securities Unveils Audited 2025 Results and Confirms Cash Dividend Payout](https://longbridge.com/en/news/281031946.md) - [US April CPY 3.8% y/y vs 3.7% expected](https://longbridge.com/en/news/286100303.md) - [April's inflation spike leaves Warsh and the Fed zero excuses not to raise rates](https://longbridge.com/en/news/286316996.md) - [GF Securities Remains a Buy on China International Capital (CNICF)](https://longbridge.com/en/news/281482597.md) - [U.S. 1-year bills high rate 3.650%](https://longbridge.com/en/news/286126535.md)