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China Fund News reporter Li Shuchao and Zhang Ling

Although the overall performance of wealth management products has shown a downward trend this year, when looking at the details, fixed-income wealth management products have performed well and are better than other product categories.

Many industry insiders said that the continued bull market in bonds in the first half of the year was an important reason for the outstanding performance of fixed-income financial products. Looking ahead to the second half of the year, whether the leading advantage of fixed-income financial products can continue depends mainly on changes in fundamentals and policies. Ordinary investors still need to comprehensively consider various factors and make rational investments.

Fixed-income financial products lead in returns

According to Puyi Standard data, as of July 14, the average annualized yield of wealth management products this year was 3.3%.

Specifically, the return performance of fixed-income financial products is still relatively outstanding, with an average annualized return of 3.54% this year. Among them, pure fixed-income products are 3.69%, "fixed-income +" products are 3.41%; during the same period, mixed financial products are 1.88%, and equity products are -4.67%.

"The fixed income wealth management products have performed outstandingly, mainly due to the divergence in trends between the bond market and the stock market." Li Wenyan, a researcher at PwC Standard & Poor's, said that since the beginning of this year, due to the slow economic recovery, reduced market risk appetite, coupled with the continued loose monetary policy, slow issuance of special bonds, and a decline in credit and other multiple factors, bond yields have declined and the bond market has strengthened significantly.

Lou Feipeng, a researcher at the Postal Savings Bank of China, also said that bank wealth management products mainly invest in bonds. The bond market performed outstandingly in the first half of this year, and fixed-income wealth management products also reaped good returns.

"From the perspective of the performance of underlying assets, bond assets have performed well this year. Fixed-income wealth management products have benefited from this and also achieved good and stable returns," said the Ruizhi Xinhong Financial Research Institute.

Investment still needs to remain rational

Looking ahead to the future market, the interviewed institutions and industry insiders said that whether the returns of fixed-income wealth management products will continue to lead in the second half of the year will mainly depend on changes in fundamentals and policies.

Among them, Lou Feipeng believes that the performance of fixed-income financial products will continue to exceed that of equity-based financial products, but the gap between the two may narrow. The reason behind this is that the central bank actively guides the medium- and long-term treasury bond yields to stabilize in a reasonable range. As the economy continues to recover, the valuations of many areas or industries in the stock market are at a low level, providing structural investment opportunities.

Li Wenyan also said that whether the yield of fixed income wealth management products will continue to be better than that of equity wealth management products mainly depends on the progress of economic recovery. If the fundamentals and risk preferences of off-market funds see positive changes in the second half of the year, the yield of equity wealth management products is expected to increase.

Li Wenyan further analyzed that in the bond market, considering the current economic recovery, the possibility of a systemic reversal in the second half of the year is low, but the current bond yield is already at a low level, and there is relatively little room for further decline, and it may be mainly volatile in the short term. In the stock market, the overall valuation of A-shares is currently at a historically low level, with limited room for decline. Whether it can stabilize and move upward depends mainly on policy stabilization and economic recovery.

On the other hand, since the beginning of this year, fixed-income financial products have continued to be favored by investors due to their outstanding performance, and the scale has increased significantly in the first half of the year. The interviewed institutions and industry insiders believe that for ordinary investors, the allocation of financial products in the future market still needs to comprehensively consider multiple factors and make rational investments.

"For financial investors, it needs to be clear that financial products are relatively stable asset management products. In the process of financial investment, it is necessary to clarify the balance between risk and return, and based on this, rationally allocate financial products." Lou Feipeng said.

Ruizhi Xinhong Financial Management Research Institute believes that looking ahead to the second half of the year, an important consideration is that the Federal Reserve may begin to cut interest rates, and now is the time to consider investing in U.S. Treasuries. Therefore, it is recommended that the financial management layout in the second half of the year should highlight globalization, and you can invest in fixed-income QDII financial products that invest in U.S. Treasury bonds.

In addition, before investing, Ruizhi Xinhong Financial Research Institute recommends that investors study the following factors clearly: one is duration, for example, study the proportion of U.S. Treasury bonds of various maturities in the product; second, whether to lock the exchange rate, and the lock ratio; third, the country distribution, including the proportion of U.S. Treasury bonds, whether there are Chinese dollar bonds and related types.

Li Wenyan also mentioned that cash management and fixed income products have relatively low risks and can provide investors with relatively stable returns. They are still good choices in the current market environment, especially for investors with low risk appetite. For investors with a certain risk appetite, it is recommended to consider diversified allocation, pay close attention to changes in market fundamentals, policies, and sentiment, and moderately allocate hybrid and equity financial products.

Editor: Joey

Reviewer: Chen Siyang

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