Holiday funds don't take a break! Keep this short holiday arbitrage guide handy.

Qingming holiday is approaching, and the A-shares market will be closed for three days from April 4th to 6th, reopening normally on Tuesday, April 7th.

For on-market funds, this is considered a relatively good “wool-harvesting” window—low operational threshold, flexible liquidity, neither occupying equity positions nor reducing holdings, while increasing returns during the holiday period.

【How exactly to operate?】

Step 1: Sell reverse repurchase on April 2nd

Before 15:30, sell 1-day government bond reverse repurchase (GC001, code 204001R-001, code 131810).

Interest calculation rule: Funds are actually occupied for 4 days, and interest is also calculated over 4 days.

Step 2: Buy government bond rate ETF on April 3rd:

Reverse repurchase funds will automatically arrive at the market open (available but not tradable), so you can buy the China Government & Policy Bank Bond ETF (511580).

Enjoy bond coupon payments and potential capital gains.

Risk warning: This strategy is based on trading rules and is a trading suggestion; it does not guarantee principal safety. Funds are risky; investment should be cautious.

【What are the highlights of China Government & Policy Bank Bond ETF (511580)?】

Highlight 1: Among similar 0-3 year policy bank bonds, the best liquidity and largest scale

The ETF’s latest scale is 5.37B yuan, leading among similar products. The average daily trading volume this year is 2 billion yuan, with very high liquidity (Data source: Wind, as of March 31, 2026). Large scale and good liquidity mean narrow bid-ask spreads and high trading efficiency, suitable for institutions and large investors.

Highlight 2: Pure cash alternative, T+0 same-day turnaround trading, maximizing capital efficiency

Based on T+0 trading mechanism, the China Government & Policy Bank Bond ETF can be bought and sold on the same day, with funds available immediately; primary market cash subscriptions and redemptions mean cash is received directly instead of bonds, enabling faster capital turnover. When the stock account is empty, buying 511580 and selling when needed can be seamlessly connected in two steps, avoiding missing any trading opportunities.

Highlight 3: Pledge ratio of 103%, high capital utilization, leverage to boost returns without compromise

Holdings of 511580 shares can be pledged as collateral, with a pledge discount rate of about 103% (Data source: China Securities Depository and Clearing Corporation, as of March 31, 2026), meaning 1 ETF share can be financed for about 103 yuan.

After financing, buying more ETF can leverage and increase returns (for example, with GC007 rate at 1.6%, holding for 7 days can increase returns by about 4.75 basis points, roughly 0.0475%). Government bonds and policy bank bonds have extremely low credit risk, making pledge security reliable.

Highlight 4: Short duration, relatively small volatility

The index focuses on bonds with 0-3 year maturities, with a modified duration of only 1.23 years and a yield to maturity of 1.26% (Data source: Wind, as of March 31, 2026).

Over the past ten years, annual returns have been positive, with an average annualized return of 2.91% and annual volatility of 0.64% (Data source: Wind, period 2016-2025). Volatility is relatively low (bond fund index annualized volatility is 1.28%).

【Comparison with common cash management tools】

Compared to money market funds, the China Government & Policy Bank Bond ETF (511580) has clear advantages in yield and trading flexibility:

Higher returns, especially in recent years as risk-free rates declined, with an average annualized return of 2.41% over the past three years, significantly higher than the money fund index of 1.66% (Data source: Wind, as of March 31);

Money funds cannot be pledged, but the ETF shares held in 511580 can be pledged for reuse, making trading more flexible and serving as a strong alternative to money funds.

Compared to short-term financing ETF, the China Government & Policy Bank Bond ETF (511580) excels in qualification and liquidity:

In terms of issuers, both have extremely low credit risk—top ten constituent bonds of 511580 are all government bonds, with transparent holdings; short-term financing ETFs mainly hold short-term financing bonds, with slightly lower qualification than government bonds.

The key advantage is—511580 can be pledged, which short-term financing ETFs do not support.

Risk warning: Funds are risky; investment should be cautious.