A full perspective of the major asset management products in 2023

2023 Year-end Special Issue丨Recovery and opening potential

Written by 丨唐曜华

Editor丨Fang Haiping

In 2023, the A-share market did not wait for the expected market, but fell in the second half of the year, once again starting the 3,000-point defense battle. Equity asset management products will usher in a "chill" in the volatile market "torment" in 2023, while bond asset management products will gain more and more "fans" in the bullish bond market.

Judging from the performance of different asset management industries, the average return of most products is negative, and only the average return of brokerage collective wealth management products and bank wealth management is positive. In the market situation in 2023, the performance of bank wealth management in pursuit of low-volatility, stable and absolute return labels is more prominent than that of public funds, once again highlighting the different positioning and characteristics of the two asset management sub-industries. In 2023, more than 9 percent of bank wealth management will achieve positive returns, and nearly 6 percent of public funds will lose money.

From the perspective of different types of products, most of the equity products are in a state of floating loss, among which the equity products of brokerage collective wealth management and trust products perform relatively well. The average return of pure debt products in 2023 will be between 2% and 4%, of which pure debt insurance asset management products have the highest average return of 3.69%, and the net value of pure debt wealth management products will fluctuate the least, with an average maximum drawdown of only -0.14%.

From the perspective of volatility indicators, among all kinds of asset management institutions, the average maximum drawdown of public funds is the largest, and the maximum drawdown of bank wealth management is the smallest. As of December 25, the average maximum drawdown of public funds was -12.89%, and the average maximum drawdown of wealth management products of wealth management companies was only -0.69% this year. The overall drawdown of trust products is also relatively low, with an average maximum drawdown of -3.19%. Insurance asset management products and brokerage collective wealth management are in the middle, with the average maximum drawdown of -6.24% and -4.29% respectively.

Bank wealth management: more than 9 percent of products have positive returns, and the net value fluctuation tends to be smaller

According to the data of Nancai Wealth Management, as of December 25, the average return of the wealth management company's existing public wealth management products this year (the cumulative net value growth rate, the same below) was 2.73%, of which 93.8% of the wealth management products achieved positive returns. It mainly relies on fixed income products to achieve "stable" performance.

Among them, pure fixed income wealth management products have returned an average of 3.31% this year, of which 141 pure fixed income products have returned more than 5% this year, and only 18 products have returned negative this year. Fixed income + wealth management products may be affected by the performance of the stock market or options, etc., and the overall yield is slightly lower, achieving an average return of 2.77%.

Hybrid wealth management products and equity wealth management products are more affected by the downward movement of the stock market. Equity wealth management products have the largest losses, with an average return of -12.14% since the beginning of this year, and hybrid wealth management products have barely achieved an average positive return, with an average return of 0.63% since the beginning of this year.

Among all types of asset management institutions, the biggest characteristics of bank wealth management are stability and low volatility, and in a market like 2023, the advantages of this feature are particularly prominent.

At the end of 2022, affected by the sharp fluctuations in the bond market, the net failure rate of bank wealth management once reached 21.23%. This year, with the bullish bond market, the net failure rate of bank wealth management has dropped sharply. As of December 25, only 4.7% of wealth management products were broken.

As of December 25, the average value of pure fixed income wealth management products in 2023 is -0.14%, which is significantly lower than the maximum drawdown of -1.42% in 2022. The drawdown is also significantly smaller than that of other types of asset management products. According to wind data, as of December 25, the average maximum drawdown of pure debt public funds, pure debt brokerage collective wealth management products, and pure debt insurance asset management products in 2023 will be -0.35%, -0.32%, and -0.41%, respectively.

Behind the decline in the fluctuation of the net value of bank wealth management is that the proportion of cash and bank deposits has increased sharply, and the proportion of equity assets has decreased, and bank wealth management has greatly increased the allocation ratio of cash and bank deposits in 2023, wind data shows that at the end of 2022, the proportion of cash and bank deposits allocated by bank wealth management will be 2.15%, and the allocation ratio will reach 23.46% at the end of June 2023, and it will decline at the end of September 2023 but the allocation ratio is still not low, reaching 17.38%. The allocation ratio of equity assets decreased significantly, from 3% at the end of 2022 to 1.27%.

Public funds: nearly 6% of the products have floating losses

As of December 25, the average net value growth rate of public funds this year was -5.95%, nearly 39.76% of public funds achieved positive returns, and nearly 6 percent of public funds lost money this year. If compared with the performance benchmark, half of the mutual funds outperformed the performance benchmark. The public fund with the highest return is the QDII fund GF Global Select RMB, with a net value growth rate of 65.17% since the beginning of this year.

As of December 25, the average returns of equity funds and hybrid funds in 2023 are -11.18% and -11.19%, respectively. Bond mutual funds benefit from the return of the bond market, with an average return of 2.25% in 2023. Among them, the average return of pure debt (including short-term pure debt, medium and long-term pure debt, the same below) public funds will reach 3% in 2023.

From the perspective of investment style, as of December 25, the small-cap growth fund index, small-cap style fund index, and small-cap balanced fund index have returned the top this year, while the large-cap growth fund index, growth fund index, large-cap style fund index, and mid-cap growth fund index have fallen first. Looking at the specific funds, the good performance of the small-cap growth fund index is mainly due to the good performance of funds mainly invested in stocks on the Beijing Stock Exchange, and the poor performance of the large-cap growth fund index is mainly due to the large decline of low-carbon and new energy theme funds.

The performance of brokerage asset management is "against the market": the equity class is excellent, and the bond class is weak

The varieties that will perform well in 2023 are stocks, but the performance of pure debt products is weak. As of December 25, the average total return of brokerage collective wealth management products this year is 1.05%, of which the performance of equity brokerage collective wealth management this year is acceptable, with an average return of 5.89% this year, which is the best performing equity asset management product in 2023. The average return of hybrid brokerage collective wealth management has been -3.14% since the beginning of this year, and the average return of pure debt brokerage collective wealth management has been 2.12% since the beginning of this year.

According to the analysis of the 21st Century Asset Management Research Institute, the good performance of brokerage stock-based collective wealth management products may be related to the issuance of a lot of products participating in the strategic placement of IPO enterprises, there are 71 brokerage collective wealth management products whose names involve "placing", as of December 25, the average return of these 71 products this year is 12.24%, mainly stock-based, and there are also a few hybrid products, or the average rate of return of the corresponding type of brokerage collective wealth management products has been raised.

Trust: Thunderstorm product redemption welcomes progress, and the performance of equity standard products is acceptable

As the real estate industry continues to thunder, the trust industry, which has transfused blood for real estate, will also continue to "thunder" in 2023, coupled with the fact that some political trust trusts are also overdue from time to time, the stock risk of the trust industry has been exposed at an accelerated pace, and many trust companies such as Zhongrong Trust and Wanxiang Trust have a payment crisis.

At the same time, some trust companies that have been "out of danger" in the past few years have begun to pay discounts one after another. More than three years after the outbreak of the Sichuan Trust Redemption Crisis, the redemption plan has recently ushered in, and the redemption ratio of natural person investors is four to eight percent. In May 2023, Essence Trust will start the discount payment for natural persons, and the redemption plan is divided into two payment methods: spot and forward, with the spot redemption ratio of 50%~80% and the forward redemption ratio of 75%~90%. The redemption plan introduced by New Era Trust in 2022 is similar to that of Essence Trust, which is 50%~80%.

Due to frequent risks, financing trusts will continue to be the target of pressure reduction in 2023. According to the statistics of CITIC Trust, as of 2023, the scale of non-standard debt financing business, represented by real estate and urban investment companies, will decrease by 12% compared with 2018.

In March 2023, the promulgation and implementation of the three classifications of trust business further clarified the positioning of trust companies. The trust industry has accelerated its transformation, from the traditional non-standard debt financing business in the past to the comprehensive development of "asset management + wealth management + service trust".

From the perspective of the performance of trust investment products, the performance of equity trust products is acceptable, with an average return of -1.28% in 2023, and many of them adopt strategies such as quantitative longs and arbitrage. Bond trust products have returned an average of 2.46% since the beginning of this year, which is a decent performance.

However, the currency products of trust companies still have certain income advantages due to the relatively few restrictions on investing in bonds at present. Currency trust products have become one of the varieties favored by investors in 2023. According to wind data, the average 7-day annualized rate of return of 145 currency trusts with available data on December 29 was 3.06%, while most of the 7-day annualized returns of currency products of other types of asset management products were below 3%, and some were even lower than 2%.

Insurance asset management: Pure debt products performed well

According to wind data, as of December 25, the average return of insurance asset management products this year is -1.74%.

The performance of equity insurance asset management products is average, with an average return of -11.4% since the beginning of this year, and a relatively small loss of hybrid insurance asset management products, with an average return of -6.66% since the beginning of this year. Pure debt insurance asset management products have performed well, with an average return of 3.69% since the beginning of this year, making them the pure debt asset management products with the highest average return.

In terms of business scope, insurance asset management ushered in new progress in 2023, and the approval of five insurance asset management institutions to carry out ABS and REITs business on a pilot basis during the year has also attracted wide attention.

In March 2023, the Shenzhen Stock Exchange issued the Shenzhen Stock Exchange Guidelines for Confirmation of Listing Conditions for Asset-Backed Securities No. 4 - Requirements for Insurance Asset Management Companies to Carry out Asset Securitization Business (for Trial Implementation), which expands the business entities of asset securitization (ABS) and real estate investment trusts (REITs), and clarifies the application conditions, application procedures, self-regulatory and other key matters for insurance asset management companies to carry out ABS and REITs business.

In October, China Life Assets, Taikang Assets, CPIC Assets, PICC Assets and Ping An Asset Management, as the first batch of insurance asset management institutions, were approved to carry out ABS and REITs business on a pilot basis. The Shenzhen Stock Exchange said in the announcement that the participation of insurance asset management companies in ABS and REITs business is an important measure for the mutual promotion and coordinated development of insurance funds and the capital market.

SFC

Editor of this issue: Jiang Peipei, Xi, Tan Yahan