• News
• 2024-06-17

"Equity Wealth Management: 47% Max Gain, Avg 25% Return in a Month"

Recently, the stock market has shown strong performance, and equity-based bank wealth management products have also seen a significant increase!

Data shows that during the recent surge in the stock market, the average return rate of equity-based bank wealth management products approached 25%, with the highest-yielding wealth management product earning 47%, which is not inferior to the performance of the broad market index.

Industry insiders say that although equity-based bank wealth management products have shown explosiveness in investment performance, they still face many pain points in terms of product layout due to factors such as small scale, limited product quantity, and lower customer risk preference.

However, industry insiders also mentioned that as large asset management institutions, wealth management companies need to demonstrate excellent allocation capabilities and asset management capabilities in various types of assets such as fixed income and equity, and accelerating the layout of equity business has become a must.

In response to the short-term surge in equity-based bank wealth management products, industry insiders also suggest that investors should keep up with market dynamics, understand underlying assets, not chase excessively high short-term returns, and make rational investments, value investments, and long-term investments.

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Bank wealth management surges! The highest earning in the past month is 47%.

Statistics show that as of October 8, the average net value growth rate of 32 equity-based bank wealth management products in the past month (September 9, 2024 - October 8) was 24.72%.

Among them, the average net value growth rate of active products was 21.74%, and the average net value growth rate of passive index products was 29.09%.

Looking at specific products, the Huaxia Wealth Management Tiangong Daily Open Wealth Management Product No. 5 (AI Computing Power Index) had the highest yield, with a single-month increase of 47.27%, ranking first among equity-based bank wealth management products. In addition, several products such as Huaxia Wealth Management Tiangong Daily Open Wealth Management Product No. 4 (New Energy Storage Index) and China Everbright Wealth Management's Sun Hong New Energy Theme A have all exceeded a net value growth rate of 30% in the past month.

However, the research institute believes that product performance rankings based on a reasonable scale are more meaningful.Looking at the investment performance of different product scales, at the end of the second quarter of this year, among equity wealth management products with a scale greater than 10 million yuan, the one with the highest net value growth rate is Huaxia Wealth Management's Tiangong Daily Open Wealth Management Product No. 13 (CSI 1000 Index), with a net value growth rate of 36.25%, ranking first in yield among larger-scale wealth management products.

Additionally, China Everbright Bank's Wealth Management Sunshine Red New Energy Theme A has a net value growth rate of 30.88%; BlackRock CCB Wealth Management's Beiying A-Share New Opportunities Private Banking Exclusive Equity Wealth Management Product Phase 1 (minimum holding period of 360 days) has a net value growth rate of 29.22%.

BlackRock CCB Wealth Management's Beiying A-Share New Opportunities Equity Wealth Management Product Phase 2 (minimum holding period of 720 days), as well as Goldman Sachs ICBC Wealth Management's Shengxin Junzhi Private Banking Exclusive Quantitative Equity Wealth Management Product Phase 1, both products also have a net value growth rate exceeding 28%, demonstrating a significant money-making effect.

Considering the need to take into account the different scales of products when ranking investment performance, Rui Zhi Xinhong Wealth Management Research Institute believes that, first, the management difficulty of wealth management products of different scales varies; second, different product scales have different impacts on the feasibility of investors actually investing in the product and have a significant impact on the sustainability of performance.

Equity Wealth Management Products Have a Generally Low Overall Scale

Although performance has soared, in terms of management scale, equity wealth management products generally show a small management scale.

Research institute data shows that the average management scale of the current 32 equity wealth management bank products is 141 million yuan. Among them, there are only 9 products with a scale over 100 million yuan, accounting for 28%; as many as 23 products have a scale below 100 million yuan, accounting for 72%; and there are also 12 products with a scale of less than 10 million yuan, accounting for 38%.

Regarding this phenomenon, Yang Jianchao, a researcher at Puyi Standard, said that for a long time, bank wealth management has focused on fixed income and light equity in asset allocation, and the vast majority of customers also regard bank wealth management as a low-risk product. Customers who want to buy equity-oriented products are usually inclined to switch to public funds. Under the current market conditions, it is more difficult for wealth management companies to accelerate the layout of the equity market.

The person in charge of the equity department of China Post Wealth Management also frankly stated that the pain points for wealth management companies to layout equity wealth management products are obvious: first, investors have a low risk preference. Investors' impressions of wealth management are mostly停留在存款替代产品, with a low tolerance for net value fluctuations, and the concept of capital preservation has not been completely reversed, requiring long-term investor education work; second, the absolute return equity investment system is not yet complete. This is determined by the history of wealth management companies transitioning from bank asset management, and wealth management companies generally start to build an equity investment research team after becoming independent, with relatively不明显 competitive advantages compared to public funds, insurance, and securities.

However, the person in charge also mentioned that the advantages of wealth management companies compared to other asset management institutions are mainly in two aspects: first, a strong channel end. The innate advantages of the parent bank channel and the synergistic communication mechanism give wealth management companies a relative advantage in channel promotion; second, the advantage of scale, bank wealth management company product lines are diverse, and equity investment can tolerate a certain nurturing period as a direction for growth and innovation."Currently, wealth management companies have a large and relatively stable scale of asset management, and have accumulated a wealth of cooperative institution resources and strategies, which can provide various experiences and support for enhancing equity management capabilities. Moreover, the overall equity ratio is relatively low at present, and the volatility of equity asset allocation can be adapted to customer preferences," said the person in charge.

Wang Tieniu, director of the fund evaluation center at Ji'an Jinxin, also agrees with the above view and believes that the advantage of wealth management companies in laying out equity-based financial products lies in the high trust of investors in the banking system's financial products. At the same time, financial products have the innate advantage of being promoted through banking channels.

"The construction of the equity team requires a process, which makes wealth management companies also face greater challenges in managing equity assets. In addition, investors in banking financial products usually have a low acceptance of high-volatility products, and wealth management companies need to balance returns and risks when designing equity products to meet investor needs," Wang Tieniu said.

Accelerating the layout of equity business has become a must

From the perspective of product types, among the 32 equity-based banking financial products, the top three products with the highest net value growth rate are all passive index products, with the main investment assets being the constituent stocks of the tracked index targets. Although the net value growth rate of the three products is prominent, their scale at the end of the second quarter of this year is not large, all below 200 million yuan.

From the perspective of the holding portfolio, as of the end of the second quarter, the proportion of equity assets after the three products passed through is all above 90%, and their top five heavy stocks are Cambrian, Guodian Nanrui, and Home Furniture.

There are 9 products with a scale of more than 100 million yuan on the list, among which the BlackRock Jianxin Wealth Management Beiying A-Share New Opportunity Private Banking Exclusive Equity Financial Product 1st Phase (minimum holding of 360 days) has the largest scale, with a scale of nearly 1.5 billion yuan at the end of the second quarter.

According to the data of the second quarter report in 2024, its equity asset ratio is 94.28%, and the top five heavy stocks include Kweichow Moutai, China Merchants Bank, Midea Group, Wuliangye, and Gree Electric Appliances.

Under the effect of making money in the stock market, accelerating the layout of equity business has become a must. However, wealth management companies as a whole pursue a stable and absolute return target, how to reconcile equity investment with it has become an important issue.

The person in charge of the equity department of China Post Wealth Management said that as an all-round asset management institution, the layout of equity products is an inevitable trend and direction, and the market's stage performance will not affect the overall development goals of the industry.The person in charge analyzed that, on the one hand, as an asset that can outperform inflation in the long term, the demand for equity from investors has always been present. Therefore, as large-scale asset management institutions, equity is an asset category that wealth management companies must layout and continuously improve their management capabilities.

On the other hand, the goal of wealth management companies is to grow into a world-leading asset management institution. Therefore, they must have excellent allocation capabilities in various assets, and equity is one of the most important asset categories. Especially now, with the relatively small scale of domestic derivative markets, equity and fixed income are the two largest asset categories and are indispensable for long-term allocation. Therefore, the equity market will be an area where research resources are continuously invested to improve customer returns.

Wang Tieniu also suggested that, considering the relatively low risk preference of bank wealth management customers and the still volatile market, when bank wealth management companies layout equity products, they can prioritize flexible allocation, "fixed income +", neutral strategy, and other investment strategies. As the A-share market stabilizes and equity management experience accumulates, they can then increase the layout of products with larger risk fluctuations.