Mixed bank financial products issuance heats up in February

Our reporter Peng Yan

In the context of a sustained low-interest-rate environment and increasing demand for wealth appreciation among residents, wealth management companies are accelerating the deployment of equity-including financial products. According to China Wealth Management Network, for example, hybrid financial products with higher equity inclusion ratios saw a significant increase in issuance in February, with both month-on-month and year-on-year growth.

From the supply side, facing the industry environment of continuously declining market interest rates, wealth management firms are speeding up their product strategy transformation, making equity-including products a core focus for optimizing asset allocation and enhancing market competitiveness. As a key category of high-equity-inclusion products, hybrid wealth management products performed particularly well in February.

Data from China Wealth Management Network shows that in February, more than ten wealth management companies, including ICBC Wealth Management, ABC Wealth Management, Xingye Wealth Management, and Ningbo Wealth Management, issued a total of 33 hybrid financial products, a 120% increase month-on-month and an 83.33% increase year-on-year. These products cover diversified investment strategies such as IPO subscriptions, preferred stocks, and index rotation, with significantly increased deployment.

The key reason for the continued popularity of these products is their yield advantage. According to monitoring data from PuYi Standard, the average performance benchmark of open-ended hybrid products in February was 3.03%, far higher than the 1.83% average benchmark of fixed-income products; closed-ended hybrid products had an average benchmark of 2.38%, also slightly above the 2.35% of closed fixed-income products.

Many bank relationship managers told reporters that as the equity market gradually warms, hybrid products’ return potential significantly outperforms pure debt products, continuously attracting investors.

The increase in issuance of hybrid wealth management products is not a short-term market fluctuation but an inevitable trend driven by the deepening of the industry’s net value transformation. Yang Haiping, a researcher at the Shanghai Financial and Legal Research Institute, stated that this change indicates that the underlying asset allocation of wealth management products is accelerating from “primarily fixed income” to “diversified allocation,” which is an important direction for product innovation and business upgrading in wealth management firms.

Xue Hongyan, a special researcher at Suzhou Commercial Bank, said that in the short term, the ongoing decline in interest rates continues to compress the yield space of pure fixed-income products, while hybrid products can effectively balance risk and return, precisely matching residents’ core needs for wealth appreciation. In the long term, under the background of regulatory encouragement for industry diversification and the ongoing deepening of net value transformation, equity-including products have become a long-term core focus for wealth management companies.

Ming Ming, Chief Economist at CITIC Securities, stated that the transformation of wealth management product structures toward equity-inclusion and diversification will effectively enhance the industry’s research and development capabilities and product innovation, promote the migration of residents’ savings into the wealth management market, and inject long-term stable capital into the capital markets.

Industry experts believe that looking ahead, the “debanking” effect will further manifest, and the issuance scale and market share of equity-including wealth management products are expected to steadily increase. Going forward, wealth management companies need to continuously optimize product design and diversify investment strategies, seeking a better balance between return and risk, and promote the development of products toward more refined and differentiated directions, providing residents with more diverse options for wealth management.

(Edited by: Qian Xiaorui)

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