Financial Scale Rebounds to 29T, Institutions Speed Up Gold-Linked Product Issuance, Shareholder Banks See Growth

Wealth Management Scale Rebounds to 29 Trillion, Funds May Lean Towards Equity Products

Data from China Merchants Securities shows that as of October 20th, the scale of ongoing wealth management was 29.10 trillion yuan, rebounding by 195.5 billion yuan compared to the previous weekend. This trend is mainly attributed to the subsiding of redemption waves, the gradual recovery of net values of wealth management products, and the warming market performance, which have driven the expansion of the wealth management scale once again. In the future, with the further implementation of policies, wealth management funds may gradually tilt towards equity products. According to statistics from CITIC Construction Investment Research Report, the incremental space for mixed products in the future will be between 1 trillion yuan and 2 trillion yuan, and the incremental space for equity products is about 1 trillion yuan. At the same time, from the perspective of the asset side, the incremental space for equity assets may reach 2 trillion yuan, accounting for about 10%. The scale of wealth management funds entering the market is expected to be between 2 trillion yuan and 3 trillion yuan, which will inject more vitality into the capital market and drive the overall market growth.

First Batch of Bank Wealth Management Third-Quarter Reports Unveiled, Equity Products Perform Well

The first batch of bank wealth management third-quarter reports has been unveiled. Reporters from Shanghai Securities News noticed that recently, ICBC Wealth Management, China Merchants Bank Wealth Management, and Hangzhou Bank Wealth Management have taken the lead in disclosing the third-quarter reports of their products. In this third-quarter report, equity products and products containing "rights" have performed well, becoming the biggest highlight. China Merchants Bank Wealth Management was the first to disclose the third-quarter report of equity products, with investment managers of several products collectively optimistic about the future performance of A-shares. Investment managers of Hangzhou Bank Wealth Management's related products are also full of expectations for the future stock market. At the same time, Hangzhou Bank Wealth Management remains optimistic about the fixed-income market, believing that strategically selecting high-liquidity assets can increase portfolio returns through leverage if the interest rate spread widens.

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Wealth Management Companies Increase Layout of Mixed Products, Preferred Stock Strategy Remains "Hot Cake"

Data from NanCai Wealth Management shows that in September 2024, the newly launched products of wealth management companies were still mainly fixed-income products, accounting for more than 95% of the total number, reaching 97.8%, slightly down from 98.26% in August. A total of 25 mixed products were issued, a significant increase from 4 in August, 4 commodity and financial derivative products were issued, and 3 equity products. From the perspective of investment strategy, the preferred stock strategy has become a hot cake, with products from Agricultural Bank of China Wealth Management, ICBC Wealth Management, Bank of Communications Wealth Management, and Everbright Wealth Management all favoring the allocation of preferred stocks. From Wind data, preferred stocks show a good dividend advantage, with generally high dividend rates, and all outstanding preferred stock dividend rates are above 3.5%. In the current market environment, whether from the perspective of dividend income ability or the repayment ability of the issuing entities, bank preferred stocks have become a type of asset that institutions pay attention to. However, due to the limited scale of bank preferred stocks, the scarcity of assets also limits the capacity of this type of strategy. At present, the overall scale of this type of strategy product is relatively small, and liquidity is also low.

Stock Market Sentiment Cools, Banks Mainly Promote Short-Term Cash Wealth Management and ETF Index Funds

Entering mid-October, the previous frenzy in the A-share market has gradually cooled down, coupled with the arrival of a new round of interest rate cuts, high-yield assets are extremely difficult to find in the market. Reporters interviewed several bank wealth management managers and learned that currently, the main wealth management products promoted by banks are short-term cash wealth management products and ETF index funds, but overall sales are relatively flat.

Different from the recent scale fluctuations of bank wealth management, the scale growth of funds in September was stable. According to data as of October 23rd, at the end of September, the total net value of public funds was 32.07 trillion yuan, a month-on-month increase of 3.79%.

In the Golden Bull Market, the "Gold" Content in Bank Wealth Management Market Rises RapidlyRecently, with the continuous rise in gold prices, many institutions have actively responded by adjusting and increasing their allocation of gold assets, accelerating the issuance of gold-linked financial products, and increasing the proportion of gold assets in investment portfolios. China's financial website shows that there are currently 89 registered gold-related financial products, among which, there are as many as 34 gold financial products in the queue, still in the "for sale" status, with issuing institutions including China Merchants Wealth Management, CITIC Wealth Management, Everbright Wealth Management, and Ping An Wealth Management.

The pricing of newly issued fixed-income products has fallen to 2.86%, and the pressure on the maturity of closed-end products from wealth management companies has increased.

Data from the Southern Wealth Management Pass shows that, affected by the decline in asset returns, the average pricing of newly issued fixed-income products in September continued to fall to 2.86%. The total number of closed-end RMB products maturing for wealth management companies increased by 33.38% compared to August, totaling 1059. Compared to the data from August, the maturity pressure for products with a term of 3-6 months and 1-2 years increased in September, with the proportion of maturing products increasing by 6.7 percentage points and 4.65 percentage points, respectively. In terms of the achievement rate, the comprehensive performance center achievement rate is 45.38%, and the performance lower limit achievement rate is 74.75%. The performance center achievement rate of fixed-income products is 46.83%, which is 7.2 percentage points lower than in August, and the performance lower limit achievement rate is 76.93%; among the mixed category, 5 products have reached the lower limit of the performance comparison benchmark, with 2 reaching the performance comparison center.

Many banks' wealth management subsidiaries have reduced product fees, and some products have achieved a "zero fee rate".

On October 24, China Merchants Wealth Management issued a fee discount announcement, reducing the fixed management fees and sales rates for some products. According to an incomplete count by reporters from the "Securities Daily", since October, many wealth management subsidiaries, including Minsheng Wealth Management, Huaxia Wealth Management, and Huihu Wealth Management, have reduced the sales rates and management fees for some products. After the adjustment, the management fees for many financial products have been reduced to 0.

The sales scale of wealth management of joint-stock banks has increased significantly, and the sales scale of China Merchants Bank's wealth management at the end of the third quarter was 3.86 trillion yuan.

Data obtained by the reporter shows that the sales scale of bank wealth management of joint-stock banks has increased significantly as of the end of September this year, among which, the increase of more than 10% includes Guangfa Bank with 16.3%, CITIC Bank with 11.8%, and China Merchants Bank with 10.3%. Among them, the sales scale of bank wealth management by China Merchants Bank as of the end of September this year reached 3.86 trillion yuan, far exceeding the second-ranked CITIC Bank with 1.41 trillion yuan. Industrial Bank also has a sales scale of over one trillion yuan, at 1.23 trillion yuan. The sales scale in the range of 90 billion includes Shanghai Pudong Development Bank and Minsheng Bank, and China Everbright Bank is at the 80 billion level.

Zhang Hongliang is the new chairman of Bank of Communications Schroders Fund.

Bank of Communications Schroders Fund issued an announcement on the appointment of the chairman (legal representative), with Zhang Hongliang as the new chairman and Zhou Yunkang as the new chief information officer, with the appointment date being October 23, 2024. Zhang Hongliang has served as the party committee secretary, president, and chairman of Bank of Communications Life Insurance Co., Ltd., and concurrently as the chairman of Bank of Communications-AXA Wealth Management Co., Ltd.; and the party committee secretary and chairman of Bank of Communications Wealth Management Co., Ltd.

Zhong Wenyue, president of China Merchants Wealth Management: Three "releases" to promote the entry of wealth management funds into the market.Addressing the issue of financial management funds entering the market, Zhong Wenyue, President of China Merchants Bank Wealth Management, proposes the following suggestions: Firstly, it is hoped that the restriction on customers purchasing R4/R5 financial management products requiring face-to-face signing will be lifted. This limitation has significantly reduced the enthusiasm of the general public to participate in financial equity products. On one hand, once a bull market starts, the construction of public fund equity capabilities is far superior to that of financial management. If purchasing financial management still requires face-to-face signing, the public's first choice will be public equity products, not financial equity products. On the other hand, public fund products have a complete and rich product line, ranging from ETFs to off-exchange index pure stock active equity, biased stock, biased debt, and various positions containing equity products. If financial management's R4/R5 products still require face-to-face signing, it will be difficult for financial management companies to develop their equity interests.

Secondly, it is suggested to open up securities firms and internet distribution channels. Currently, the sales of financial management products are mainly limited within the banking system, and the corresponding customer risk preferences are relatively low. Further improving market investment education, diminishing the expectation of guaranteed returns, strengthening the expectation of net value fluctuations, and expanding sales channels and customer groups will be beneficial in enhancing the risk preferences of customers within the banking system. Imagine a product that can be purchased through both bank channels and securities and internet channels. Although there are some drawdowns in the products on securities and internet channels, their investment education is relatively mature, which can drive the improvement of risk preferences among bank customers.

Lastly, it is recommended to introduce institutional clients as investors and to liberalize the issuance of passive products. Currently, the institutional clients of bank financial management institutions are only corporate clients, and corporate clients view financial management as a substitute for deposits. Allowing asset management companies, finance companies, and peer institutions to purchase bank financial management will further promote the construction of equity investment capabilities in the financial management industry. At the same time, passive products will be the main direction of the capital market in the future, and financial management companies should actively participate. Although financial management companies lack a first-mover advantage in issuing ETFs, issuing ETFs and building capabilities are of great significance for the long-term development of the financial management industry.