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China Fund News reporter Wang Yangyishan

Since the implementation of the new asset management regulations, the performance benchmark has become an important indicator for evaluating bank wealth management products. Whether the actual rate of return of the product can reach the performance benchmark (i.e. the performance achievement rate) has attracted great attention from investors.

Recently, the latest statistics released by the Ruizhi Xinhong Financial Research Institute showed that as of the end of the second quarter of 2024, the performance benchmark lower limit compliance rate of 3,725 (including sub-units) matured closed-end public offering RMB products under 30 wealth management companies was 85.99%, an increase of 9.13 percentage points month-on-month.

Among them, the average rate of compliance with the lower limit of the performance benchmark for fixed income products was 88.03%, an increase of 8.03 percentage points month-on-month; the rate of compliance with the lower limit of the performance benchmark for mixed products was 11.11%, an increase of 6.72 percentage points month-on-month.

The fixed income performance lower limit compliance rate continues to rise

Data from the Ruizhi Xinhong Financial Research Institute shows that there are 3,725 closed-end public offering RMB products due in the second quarter of 2024, involving 30 wealth management companies. Among them, there are 3,626 fixed income products, accounting for 97.34%; there are 99 hybrid products, accounting for 2.66%.

In the second quarter of this year, the average rate of compliance with the lower limit of performance of fixed income products was 88.03%, an increase of 9.13 percentage points from the previous month, and the weighted average redemption yield was 3.23%.

Specifically, among the 30 companies, 28 achieved a lower limit compliance rate of more than 50%, and 23 achieved a lower limit compliance rate of more than 80%. Compared with the first quarter, the number of institutions with a lower limit compliance rate of 100% in the second quarter increased to four, including Ping An Wealth Management, Bohai Bank Wealth Management, and Banco Agribank Wealth Management, and BlackRock CCB Wealth Management.

At the same time, the performance lower limit compliance rate of many institutions such as Puyin Wealth Management, China Post Wealth Management, and Ningbo Bank Wealth Management also exceeded 90%, and the performance of the vast majority of products at maturity exceeded the lower limit of the product performance benchmark.

The performance compliance rate of some financial management companies is poor, with the lower limit of performance compliance rate below 40%, which is still relatively low in the entire industry.

The Ruizhi Xinhong Financial Research Institute said that overall, the performance lower limit compliance rate of public closed-end RMB wealth management products maturing in the second quarter of 2024 has increased significantly, and the average redemption yield of fixed-income products has also increased. The increase in product compliance rates may be due to the continued downward adjustment and rationalization of product performance benchmarks, and on the other hand, it is because the bond market has performed well since the fourth quarter of 2023, driving up the yield of fixed-income wealth management products.

The compliance rate of mixed products increased month-on-month

Some companies lost money on maturity returns

In terms of hybrid products, data from the Ruizhi Xinhong Financial Research Institute showed that as of the end of the second quarter of this year, the rate of compliance with the lower limit of the performance benchmark for hybrid products was 11.11%, an increase of 6.72 percentage points from the previous month.

Specifically, in the second quarter of this year, 99 products of 12 wealth management companies matured. Among them, 11 products met the lower limit of the performance benchmark, with 100% of Everbright Wealth Management products and 50% of Ping An Wealth Management products meeting the standard. The remaining institutional products did not meet the standard, and the weighted average redemption yield was 0.93%.

Industry insiders analyzed that the stock market continued to fluctuate in the first half of this year, and investing in hybrid wealth management products has become more difficult. However, except for the weighted average redemption yield of some wealth management companies' matured products with a negative weighted average redemption yield, most wealth management companies' matured products achieved positive returns and achieved a solid return on investment.

An industry insider also said that the performance compliance rate of hybrid products of wealth management companies is at a low level this year, mainly due to the fluctuations in the equity market. With the recovery of my country's macro-economy and the promotion of a number of favorable policies this year, it is believed that the equity market will continue to pick up, which is expected to drive the performance compliance rate of hybrid products upward.

The Ruizhi Xinhong Financial Research Institute recommends that financial institutions should not set absolute performance benchmarks for hybrid products.

Editor: Huang Mei

Reviewer: Chen Siyang

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