1. Financial news
In order to meet the relevant requirements of the Interim Provisions on the Supervision of Important Money Market Funds, a number of banks have intensively adjusted their change portfolio wealth management: reducing the quick redemption limit.
The "bullishness" of the bond market has boosted investors' enthusiasm for buying wealth management, and wealth management companies have intensively raised the scale of product fundraising, with an increase of up to 20 billion yuan.
2. Earnings performance
The rise in stocks and bonds narrowed, and the growth of the net value of wealth management products slowed down. In March 2024, the average net value growth rate of existing wealth management products was 0.29%, down 0.16 percentage points from February. From the perspective of product types, the monthly net value growth rate of weighted wealth management products continued to lead, among which the income of short-duration equity wealth management products performed better, with a monthly net value growth rate of between 2% and 3%.
3. Broken net
The net failure rate accelerated and hit a new low in the past two years. According to the statistics of Puyi Standard, as of the end of March 2024, the cumulative net value of existing wealth management products was 2.86%, down 0.48 percentage points from February, and falling below 3% for the first time since January 2022.
The cumulative net value failure rate of various wealth management products has decreased across the board. In March, the cumulative net value of fixed-income wealth management products continued to decline by 0.07 percentage points, and the cumulative net value of mixed, equity, commodity and derivatives wealth management products changed from rising to decreasing, with decreases of 7.51, 2.57 and 9.43 percentage points respectively.
4. New products
The scale of new products has declined, focusing on short and medium duration and fixed income. In March, the scale of fixed income fundraising accounted for 99.69% of the newly issued wealth management products. The benchmark interest rate for the average performance of wealth management products continued to decline, and the benchmark interest rate for the average performance of newly issued wealth management products in March was 3.19%, down 0.08 percentage points from February 2024.
5. Scale of existence
Due to the obvious "strange board" phenomenon between wealth management and deposits at the end of the quarter, the scale of wealth management products decreased month-on-month in March. The scale of cash management products decreased relatively significantly month-on-month, while the scale of second-equity products increased slightly month-on-month. In terms of the types of institutions, the proportion of stock products of joint-stock bank wealth management companies and urban commercial bank wealth management companies continued to rise.
1. Financial News 1. Many banks intensively adjust change portfolio wealth management: adjust the quick redemption limit[1] Beijing News Shell Financial News, banks' "change portfolio wealth management" products are being adjusted. Since the beginning of this year, a number of banks have issued announcements on the adjustment of related products. Some banks pointed out in the announcement that the maximum quick redemption amount for a single customer on a single natural day was adjusted to 10,000 yuan, but the ordinary redemption function (T+1) was not affected. A number of analysts told the Shell Financial Reporter that the collective adjustment of the "change portfolio wealth management" product by the bank is mainly to meet the relevant requirements of the "Interim Provisions on the Supervision of Important Money Market Funds", and the adjustment of the "change portfolio wealth management" of money market fund products included in the portfolio is the highlight. 2. Wealth management companies intensively raised the scale of product fundraising, with an increase of up to 20 billion yuan[2] Financial Times News, recently, a number of bank wealth management companies such as CMB Wealth Management, Bank of Communications Wealth Management, Everbright Wealth Management, and ABC Wealth Management have raised the upper limit of the fundraising scale of their wealth management products, ranging from 1 billion yuan to 20 billion yuan. A number of industry insiders said that the reason why financial institutions raised the upper limit of new products raised is mainly because since the beginning of the year, the bond market has been "bullish", and the performance of wealth management products has been outstanding, which has further boosted investors' enthusiasm for investment, and the adjustment of the scale of fundraising has conveyed a positive signal of the rise in the scale of the wealth management market. 2. Income performance 2.1 Performance of major assets In March, affected by the weaker-than-expected decline in core CPI in the United States and the escalation of geopolitical conflicts in major oil-producing regions, reflation transactions in global capital markets heated up, copper and gold oil prices rose strongly, and the US dollar strengthened. As the Fed's interest rate meeting still retains room for interest rate cuts within the year, the stock and bond markets are relatively stable. In terms of the domestic bond market, the news is mixed with long and short, and the central bank said that there is still room for RRR cuts in the future, and will continue to maintain the market's easy monetary expectations. However, regulators have paid attention to the bond investment of rural financial institutions and guided public funds to reduce leverage to cool down the bond market. Bond yields fluctuated at low levels throughout the month, with the 10-year Treasury yield closing at 2.29%, down 4.74bp from February. In the overseas bond market, the U.S. economic data was mixed, and the U.S. Treasury yield trend was twists and turns. At the beginning of the month, the 10-year Treasury yield continued to fall by 16bp as the ISM manufacturing index fell short of expectations and the Fed made a dovish statement. Since then, as the new non-farm payrolls and CPI in the United States in February have exceeded expectations, the US Treasury yields have stopped falling and rebounded, rising by as much as 25bp. In the second half of the year, the Federal Reserve reaffirmed that it would cut interest rates this year, and U.S. Treasury yields turned downward again. At the end of the month, the 10-year Treasury yield closed at 4.20%, down 5bp for the month. In terms of the equity market, A-shares rose first and then declined. In the first half of the year, the government work report actively laid out steady growth, investors were more willing to hold shares, and A-shares rose steadily. In the second half of the month, the Federal Reserve's March interest rate meeting was held as scheduled, and the dot plot showed that the rate cut during the year was lower than market expectations, and the interest rate cut expectations converged. In the commodity market, the bullish sentiment in the crude oil market has heated up, crude oil prices have accelerated since mid-March, and copper prices have risen in tandem. Gold also rose strongly on expectations of a rate cut by the Federal Reserve and rising risks of reflation in the United States. In the foreign exchange market, the US dollar strengthened due to strong fundamentals, strong employment data, and rising reflation risks constraining the Fed's easing space. Sino-US communication strengthened the theme of "stability maintenance", and the USD/RMB broke through to the 7.24 mark and stabilized.
2.2 Distribution of Absolute Returns The progress of net value growth has slowed down marginally. According to available statistics, in March 2024, the average net value growth rate of existing wealth management products was 0.29%, down 0.16 percentage points from February. In terms of investment nature, in March, the average net value growth rate of cash management, fixed income, hybrid, equity, commodity and derivatives wealth management products was 0.17%, 0.24%, 0.46%, 1.88% and 1.63% respectively, although there were more declines from February - changes of 0.02, -0.08, -0.28, -0.51 and -4.38 percentage points respectively, but compared with other periods, it was still at a relatively high level - In March, the monthly net value growth rate of various wealth management products ranked 57.8%, 42.1%, 73.6%, 81.5% and 73.6% respectively since the beginning of 2021.
From the perspective of product types, the monthly net value growth rate of weighted wealth management products continued to lead, among which the income of short-duration equity wealth management products performed better, with a monthly net value growth rate of between 2% and 3%. Among the fixed-income wealth management products, the long-term continued to outperform the short-duration products, while the short-duration wealth management products had a higher monthly net value growth rate among the hybrid, equity, commodity and derivatives wealth management products.
The cumulative return (annualized) of the year is ranked as fixed income> equity> cash management> hybrid> commodities and derivatives, and the annualized returns of the five types of wealth management products since the beginning of this year are 3.65%, 2.94%, 2.15%, 1.50% and -27.04% respectively. From the perspective of dynamic changes, in March, the net value of wealth management products with rights continued to recover, and the overall performance was better than that of fixed income. As of March, the cumulative return (annualized) of equity, hybrid, commodity and derivatives wealth management products increased by 9.31, 2.00 and 6.50 percentage points respectively compared with February. The cumulative annual return (annualized) of cash management and fixed income wealth management products fell by 0.01 and 0.40 percentage points respectively from the previous month.
2.3 Performance compliance The performance compliance rate of existing wealth management products has declined. According to the available statistics, as of the end of March 2024, the performance compliance rate of existing wealth management products (the annualized rate of return of the product in the past one year exceeded the benchmark interest rate for performance comparison) was about 52.14%, down 3.39 percentage points from the previous month. From the perspective of investment nature, the performance compliance rate of fixed income, hybrid, equity, commodity and derivatives wealth management products fell by 2.25, 2.15, 3.42 and 3.10 percentage points respectively compared with February. From the perspective of term type, the performance compliance rate of short-duration wealth management products is higher, with the performance compliance rate of wealth management products within T+0 and 7 days (inclusive) exceeding 60%.
In March, the average excess rate of return of various wealth management products (the annualized excess rate of return compared with the performance benchmark in the past one year) generally increased compared with February, with an increase of 3-4 percentage points. However, the distribution structure of excess yields has weakened, and the proportion of positive excess has mostly fallen, with a decline of about 3 percentage points.
2.4 Redemption at maturity The yield on redemption at maturity remained stable. In March, the average yield on maturity of wealth management products was 3.07%, roughly unchanged from February (3.09%). The yields at maturity of fixed income and hybrid wealth management products were 3.25% and 0.86% respectively, a change of -0.15 and 1.46 percentage points respectively from February.
The performance compliance rate fell slightly. In March, the maturity and redemption performance compliance rate of wealth management products was 56.86%, down 5.05 percentage points from February. From the perspective of investment nature, the performance compliance rates of fixed income and hybrid wealth management products due in March were 58.82% and 23.26% respectively, a change of -5.62 and 1.35 percentage points from February.
3. Net breakage 3.1 Overall situation The net breakage rate has accelerated its decline, and the value has hit a new low in the past two years. According to the statistics of Puyi Standard, as of the end of March 2024, the number of existing wealth management products with a net unit value of 1,854 (2,160 in the previous month), accounting for 3.21% (3.86% in the previous month). The cumulative net value of existing wealth management products was 1,503 (1,697 in the previous month), accounting for 2.86% (3.36% in the previous month), falling below 3% for the first time since January 2022.
3.2 Distribution structure The cumulative net value failure rate of various wealth management products has decreased across the board. From the perspective of investment nature, as of the end of March, the cumulative net value failure rates of fixed income, hybrid, equity, commodity and derivatives wealth management products were 1.23%, 27.50%, 45.61% and 82.63%, respectively, ranking 21.0%, 63.1%, 92.1% and 94.7% since the beginning of 2021. The cumulative net value of fixed-income wealth management products continued to decrease by 0.07 percentage points month-on-month compared with February, and the cumulative net value of mixed, equity, commodity and derivatives wealth management products changed from rising to decreasing, with decreases of 7.51, 2.57 and 9.43 percentage points respectively. From the perspective of term type, the cumulative net value failure rate of wealth management products of various term types continued to decline, ranking first in the decline list with a decline of 3.27 percentage points for more than 3 years. The 3-6 months and 6-1 years cumulative net value failure rates increased by 0.12 and 0.02 percentage points respectively from the previous month. From the perspective of operation mode, the cumulative net value failure rate of closed-end and open-end net worth wealth management products decreased by 0.30 and 0.80 percentage points month-on-month, respectively, ranking in the 0.00% and 7.60% percentiles since the beginning of 2022, respectively. From the perspective of institutional types, the cumulative net value of wealth management products of joint-stock banks and wealth management companies decreased by 1.63 and 0.81 percentage points respectively, the cumulative net value of state-owned banks and urban commercial banks was roughly the same as that of the previous month, and the cumulative net value of wealth management products of rural financial institutions increased by 0.70 percentage points month-on-month.
4. New products 4.1 Product scale The number and scale of new products have both rebounded. According to the statistics of Puyi Standard, in March 2024, 2,589 new wealth management products were issued, and the scale of funds raised was 415.3 billion yuan. The number of issuances and the scale of funds raised increased by 559 and 167.5 billion yuan respectively from February. From the perspective of investment nature, the new products are mainly fixed-income wealth management. In March 2024, 2,444 new fixed-income wealth management products were issued, with a total amount of 411 billion yuan, accounting for 94.40% and 99.69% of the total products and fundraising, respectively. From the perspective of term type, the term of new products is concentrated in short and medium duration. The fundraising scale of 3 months-6 months (inclusive), 6 months-1 year (inclusive), and 1 year (exclusive)-3 years (inclusive) accounted for 37.44%, 20.31%, and 31.70% respectively.
From the perspective of operation mode, the total amount of funds raised by closed-end net worth and open-end net worth wealth management products was 398.3 billion yuan and 17 billion yuan respectively, accounting for 95.91% and 4.09% respectively, and the proportion of scale decreased by 1.59 and increased by 1.59 percentage points respectively from February. From the perspective of issuers, the new wealth management products are mainly issued by wealth management companies, urban commercial banks and rural financial institutions, and the total amount of funds raised by the three types of institutions is 366.7 billion yuan, 31.1 billion yuan and 15.2 billion yuan, accounting for 88.3%, 7.5% and 3.66% respectively, and the scale proportion is 2.18, -2.32 and 0.05 percentage points respectively compared with January.
4.2 Performance Benchmark The average performance of wealth management products continued to decline compared with the benchmark interest rate. In March 2024, the benchmark interest rate for the average performance of newly issued wealth management products was 3.19%, down 0.08 percentage points from February.
From the perspective of investment nature, the benchmark interest rate of various wealth management products continued to decline. In March 2024, the average performance benchmark interest rates of newly issued fixed-income, hybrid and equity wealth management products were 3.18%, 3.48% and 4.3%, down 0.09, 0.24 and 0.65 percentage points respectively from February.
From the perspective of term type, in March 2024, the benchmark interest rates for the average performance of newly issued wealth management products issued for more than 3 years will be 2.77%, 2.81%, 2.9%, 2.96%, 3.2%, 3.47% and 3.96% respectively, which will change -0.01, -0.03, 0.03, 0.03, and - from February to February. 0.06, -0.08, -0.07, 0 percentage points.
From the perspective of operation mode, in March 2024, the benchmark interest rates on the average performance of new products issued by closed-end net worth and open-end net worth wealth management products were 3.2% and 3.09% respectively, a change of -0.07 and -0.12 percentage points respectively from February.
5. Scale of existence 5.1 Overall situation At the end of the quarter, there was a significant "strange board" phenomenon between wealth management products and bank deposits, and the scale of funds outflow out of wealth management products in March shrank month-on-month. According to the statistics of Puyi Standard, as of the end of March 2024, the total number of existing wealth management products was 41,173, with a total scale of 26.22 trillion yuan, an increase of 5 and a decrease of 0.83 trillion yuan respectively from the end of February.
From the perspective of monthly changes, in March 2024, the net change in the scale of wealth management products was generally better than the level of the same period in previous years, with a decrease of 0.83 trillion yuan in product scale compared with a decrease of 1.13 trillion yuan in the same period last year.
5.2 Distribution Structure In terms of investment nature, the outflow of cash management wealth management products was relatively large, and the scale of equity products increased slightly month-on-month. As of the end of March 2024, the total scale of cash management and fixed income wealth management products is estimated to be 7.69 trillion yuan and 17.77 trillion yuan, a decrease of 0.73 trillion yuan and 0.09 trillion yuan respectively from the end of February. The total scale of the two types of wealth management products accounted for 97.12%, an increase of 0.27 percentage points from the end of February.
The scale of mixed, equity, commodity and derivative wealth management products was 0.6 trillion yuan, 0.04 trillion yuan and 0.04 trillion yuan, a decrease of 38.6 billion yuan, an increase of 2.4 billion yuan and an increase of 600 million yuan respectively from the end of February.
In terms of maturity types, short-duration wealth management products had a large month-on-month outflow. As of the end of March 2024, the stock of daily open-ended, less than 1 month (inclusive), 1-3 months (inclusive), and 3-6 months (inclusive) wealth management products decreased by 923.5 billion yuan, decreased by 20.2 billion yuan, increased by 44 billion yuan, and increased by 15.2 billion yuan respectively from the end of February.
In terms of operation mode, the scale of open-ended net outflow is relatively large. As of the end of March 2024, the scale of open-end and closed-end net-worth wealth management products decreased by 775.6 billion yuan and 48.8 billion yuan respectively from February, and the stock scale accounted for 77.90% and 21.22% respectively, a change of -0.21 and 0.54 percentage points from the end of February, respectively.
In terms of the types of institutions, the proportion of stock products of joint-stock bank wealth management companies and urban commercial bank wealth management companies continued to rise. As of the end of March 2024, the stock of wealth management products is mainly issued by wealth management companies, with large state-owned banks, joint-stock banks, urban commercial banks, rural financial institutions, foreign-funded banks, state-owned wealth management subs, joint-stock wealth management subs, urban commercial wealth management subs, rural commercial wealth management subs, and joint venture wealth management sub-stock wealth management products accounting for 0.46%, 1.56%, 8.18%, 3.66%, 0.11%, 29.53%, 43.06%, 10.02%, 0.44%, and 0.21%, respectively, , month-on-month changes of 0.02, -0.32, 0.30, 0.09, 0.00, -0.70, 0.23, 0.29, 0.02, -0.01 percentage points respectively from the end of February.
Annotation:
[1] Source: Beike Finance, "Bank Collective Adjustment! The Quick Redemption Limit of Change Portfolio Wealth Management Will Change", 2024/3/27[2024/4/9],https://baijiahao.baidu.com/s?id=1794682593326021162&wfr=spider&for=pc[2]Source: Financial Times, "The maximum increase is 20 billion yuan! Intensive Adjustment of Multiple Bank Wealth Management Companies", 2024/3/20[2024/4/9],https://baijiahao.baidu.com/s?id=1793978468755048919&wfr=spider&for=pc
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