The actual rate of return cannot catch up with the quotation, and the phenomenon of "inversion" of wealth management products is becoming more and more prominent

After breaking the "just exchanged" wealth management products, the quotation level such as the performance benchmark has become an important indicator, and whether the product yield can reach the "quotation" level has attracted great attention from investors. At present, the yield of more than 3% of the credit bonds is only 2 trillion yuan, compared with 27 trillion yuan of bank wealth management, there are only a handful of assets that can meet the lower limit of the 3% performance benchmark.

Industry insiders believe that this is due to the "asset shortage" background, institutions rush to raise high-yield products, bank wealth management products are difficult to "share" caused, at the same time, the performance benchmark, since its inception annualized income, 7-day annualized income and other financial product quotation indicators decline has not been able to keep up with the downward rate of return on underlying assets.

The phenomenon of "upside down" is prominent

The scale of bank wealth management ushered in a slight recovery in the first quarter of this year, reaching 27.7 trillion yuan at the end of February, an increase of about 830 billion yuan from the end of January, adding nearly one trillion yuan of wealth management products, increasing the allocation of short-end bonds significantly, focusing on the purchase of interbank certificates of deposit, interest rate bonds and credit bonds.

Despite the expansion of the scale of wealth management, the allocation sentiment of wealth management in the secondary market is not high. According to the statistics of Liu Yu's team at GF Securities, the total net purchase of wealth management in January ~ February was 177.4 billion yuan, which was only at the upper level in history (the cumulative net purchase of wealth management in January and February 2020~2023 was 180.2 billion, -64.7 billion, 179 billion, and 124.5 billion yuan respectively).

"Since the beginning of this year, the contradiction between supply and demand in the bond market has intensified, and the yield of bond assets superimposed on the preferred allocation of wealth management products has been declining, and high-yield coupons are difficult to find, resulting in the asset allocation pressure faced by wealth management products. A person from a joint-stock bank wealth management company told reporters that in the context of "asset shortage", the rate of return on underlying assets has fallen too fast, and the quotation indicators such as performance benchmarks have formed an "inverted" phenomenon.

As of the end of February, the lower limit of the performance benchmark of the daily opening products with the largest increase in scale was 2.40%, while the yield of the interbank certificates of deposit (1Y AAA grade) that it focused on holding was only 2.23%.

This situation is also played out among credit bonds. As the "ballast stone" of bank wealth management, the yield of credit bonds falls faster when the bond market is volatile. According to the statistics of Yin Ruizhe's team at SDIC Securities, as of the end of March, the yield of 15.1 trillion yuan of non-financial public credit bonds was concentrated in 2%~2.8%, of which 92% of the cash bonds were between 2.3% and 2.8%, and only 2 trillion yuan were more than 3%, accounting for about 10% of the overall scale of 18.9 trillion yuan. In comparison, most of the same kind of bonds yielded more than 3% in the same period last year, and the size of bonds above 3.5% reached 5.7 trillion yuan.

It is difficult for the rate of return on the underlying assets to reach the 3% level, and the market quotation given by most wealth management products is still higher than 3%. According to the data provided by Puyi Standard, a third-party statistical agency, as of March 31, the average annualized rate of return of the market's existing open-ended fixed-income wealth management products (excluding cash management products) was 3.20% since its establishment, and the average annualized rate of return of wealth management companies' open-ended fixed-income wealth management products (excluding cash management products) was 3.06% since its establishment.

Although wealth management companies have realized that market quotations cannot keep up with the downward rate of the real rate of return of the underlying assets, and have adjusted the performance comparison standards of their products during the year, they still cannot keep up with the downward rate of real returns. According to the data of Yin Ruizhe's team at SDIC Securities, as of the end of March, the lower limit of the performance benchmark of the new pure fixed income wealth management of the wealth management subsidiary of the joint-stock bank has reached a new low of 2.75%, but it is still higher than its actual coupon yield.

Ming Ming, chief analyst of CITIC Securities, said that the shortage of high-yield and stable assets in the asset allocation of credit bonds is becoming more and more prominent, and the income of the asset side is difficult to match the performance benchmark of various wealth management products. At the same time, under the promotion of urban investment bonds, the current short-term sinking excess returns have been smoothed out, making investment more difficult, and the sinking income of secondary permanent bonds (Tier 2 capital bonds and perpetual bonds) has also been further smoothed out.

Under the circumstance of the intensification of the contradiction between liabilities and assets, the rate of non-compliance with financial performance maintained a growth trend. According to the data provided by Liu Yu's team, in the first week of the second quarter, the performance of all wealth management products was 19.2%, an increase of 0.6 percentage points from the previous week. Broken down, all types of institutions are on the rise. The indicators of state-owned banks, joint venture banks, joint-stock banks, and urban and rural commercial banks increased by 1.2, 0.4, 0.3, and 0.2 percentage points month-on-month, respectively, to 27.7%, 52.8%, 14.2%, and 15.4%, respectively.

How to break the contradiction of income

Industry insiders interviewed by reporters believe that the "inversion" phenomenon of the market quotation of wealth management products and the yield of the underlying assets is fundamentally due to the "dilemma" faced by wealth management in the context of the difficulty of finding high-coupon assets, and this situation is difficult to reverse in the short term. Ming Ming believes that the maturity of wealth management products is determined by the liability side, and it is difficult for the asset side to have a large maturity mismatch, so it has hardly participated in the recent 30-year treasury bond fast bull market.

Liu Yu believes that taking the initiative to reduce the cost of debt may be an effective solution. It can be started from two aspects: first, the financial manager can moderately reduce the lower limit of the expected rate of return of the product according to the actual market situation; second, the financial management can take the initiative to switch the comparison standard from the lower limit of the performance benchmark to the deposit interest rate, "if the cost is set to the deposit interest rate of the same period, most of the wealth management products can basically complete the lower limit of the performance benchmark target, and the difference in income is more significant." Liu Yu said.

However, many financial managers told reporters that taking the initiative to reduce market quotations such as performance benchmarks seems to be effective, but in the actual operation process, it will bring new problems such as difficulty in obtaining customers. "When recommending wealth management products, customers will lose interest in continuing to learn, let alone buy, as soon as they see that the reference yield may even be lower than the deposit rate. The financial manager of a city commercial bank told reporters.

In the contradiction between the return on assets and liabilities, industry insiders believe that from the perspective of the long-term development of bank wealth management, only to obtain stable income is the foundation of retaining customers.

Zhang Yan, a researcher at Puyi Standard, believes that in order to continuously improve the investment and research system, "bank wealth management companies should build a comprehensive research system including macro research, industry research and asset analysis, and in terms of asset allocation, they should also establish a multi-market, multi-strategy and multi-asset asset allocation framework." ”

In the future, products with a term that allows can be appropriately extended to 3 years or more in areas with controllable risks, and at the same time, with the strategy of continuing to sink in the district and county-level platforms with controllable risks, they can appropriately increase their returns and meet the requirements of the performance benchmark on the liability side.

Some institutions also believe that the allocation value of certificates of deposit is relatively high. According to the analysis of a state-owned bank's wealth management investment manager, unlike other peer institutions in the market that rush to grab duration bonds, the allocation of duration is not the primary choice of wealth management companies, and wealth management companies can shift from the sinking varieties of credit bonds superimposed on the two permanent bonds to the sinking varieties of interbank certificates of deposit and short-term credit bonds.

"From the perspective of asset cost performance and allocation demand, the investment value of current certificates of deposit for wealth management may still be higher than that of interest rate bonds. Before the supply of income-generating assets appeared, certificates of deposit may also become a high-quality product for financial management that takes into account both volatility and coupons. Liu Yu thinks.

For investors, Liao Zhiming, chief analyst of the banking industry at China Merchants Securities, said that in the context of a significant decline in bond yields in the medium and long term, it is necessary to reduce the investment return expectations for wealth management. In the next few years, it may be difficult to expect a compound return on investment of wealth management products with fixed income as the underlying asset to exceed 3%. Not only will the coupon be lowered, but the capital gains on bond assets will also be lower and lower.

(This article is from Yicai)