The annual return on investment deposits can easily reach 5% The annualized return of two-dollar products will exceed 7% this year. 丨Cross-border wealth management assessment

Source | 21st Century Business Herald Author | Edited by Tang Yaohua | Fang Haiping New Media Editor | Intern Hu Linlin

Previously, the deposit interest rate of up to 10% under the Cross-boundary Wealth Management Connect attracted attention, and another way of indirect investment in overseas deposits has also become increasingly popular, that is, US dollar wealth management products and QDII products. As an ordinary investor, if he or she does not meet the high threshold and regional restrictions of the Cross-boundary Wealth Management Connect, he can indirectly deploy overseas deposits through US dollar wealth management products or QDII products, so what is the rate of return of such wealth management products invested overseas? Which products perform well? This issue of the 21st Century Asset Management Research Institute's "Wealth Management Evaluation" series focuses on cross-border wealth management (i.e., cross-border products issued and managed by bank wealth management companies and banks) to provide investors with reference.

Evaluation object: QDII products issued by bank wealth management companies (mainly QDII USD and QDII RMB), non-QDII US dollar wealth management products (i.e., wealth management products that do not contain QDII-related words in their names and are raised in US dollars)

Evaluation dimension: annualized rate of return since the beginning of this year and rate of return in the past year

Main conclusions:

1. From the perspective of different currencies, the top three QDIIs with the highest yields this year are British pounds, US dollars and Hong Kong dollars.

2. Performance of QDII US dollar wealth management products: the performance of related series of products of Ping An Bank, CMB Wealth Management and BlackRock CCB Wealth Management.

3. Performance of QDII RMB products: ICBC wealth management products performed the best

4. The highest average rate of return of non-QDII USD products this year is IB Wealth Management, with an annualized return of more than 7% since the beginning of this year. It is followed by Beijing Bank Wealth Management and Goldman Sachs ICBC Wealth Management. Institutions such as CMB Wealth Management and Shanghai Pudong Development Bank have relatively low average yields on such products.

1. Overall performance: The British pound has the highest QDII yield, followed by the US dollar

According to the data of Nancai Wealth Management, as of April 17, there were 1,604 US dollar wealth management products and 423 QDII products. Many US dollar products of foreign banks have been established for a long time, but there are many missing income data.

As of April 17, there were 294 US dollar QDII products, 63 RMB QDII products, and 66 QDII products in other currencies. Most of the products are established since 2023, accounting for 64%.

In terms of overall yield, the average annualized yield of GBP QDII products has reached 4.77% since the beginning of this year, the average annualized yield of US dollar QDII products has been 4.04% since the beginning of this year, ranking second, and the average yield of Hong Kong dollar QDII products ranking third. Since the beginning of this year, the average yield of RMB QDII products has been relatively low, but it still has certain advantages compared with domestic RMB deposit rates.

From the perspective of investment nature, most of the QDII products with yield data are fixed income products. Many of the products mainly invest in offshore deposits, with low-risk assets such as cash assets, deposits, and certificates of deposit as investment targets.

2. Performance of US dollar QDII products: the highest yield exceeds 6%, and some products achieve high returns by investing in overseas deposits

Since the beginning of this year, the top annualized rate of return of US dollar QDII products are 5 products of Ping An Bank's Anhui Overseas QDII USD 6-month fixed opening series, and the highest yield of "Anhui Overseas QDII US 6-month fixed opening No. 4" has an annualized rate of return of 6.38% since the beginning of this year, and the yield of 3 products of BlackRock CCB Wealth Management and 2 products of CMB Wealth Management is also not low, with an annualized yield of more than 5.3% since the beginning of this year.

The ANHUI Overseas QDII USD 6-Month Fixed Opening Series mainly invests in overseas currency and fixed income assets, and obtains stable US dollar investment income by investing in deposit assets, trading Chinese US dollar bonds, and allocating overseas fixed income mutual funds and structured products. In the fourth quarter of 2023, the allocation of high-interest US dollar deposit assets was comprehensively improved, and from the perspective of the top 10 holdings, it also invested in Chinese US dollar bonds and US dollar money market funds issued by some banks in Hong Kong.

In the first quarter of 2024, despite the volatility of U.S. bond yields, the market's optimistic risk appetite and the lack of new supply in the primary market led to a sharp 25bps narrowing of the credit spread between China and the United States dollar bonds throughout the quarter, and the Chinese dollar bond investment-grade bond index rose 1.09% for the whole quarter.

CMB Wealth Management, Zhaorui and Ding USD Closed No. 74 products stipulate in the product brochure that the products mainly invest in fixed income assets such as overseas deposits.

3. Performance of RMB QDII products: 3 products have an annualized rate of return of more than 3%

Most banks rarely issue RMB QDII products, and the number of RMB QDII products issued by Hang Seng Bank (China), CMB Wealth Management, ICBC Wealth Management and other institutions is the highest, and only CMB Wealth Management and ICBC Wealth Management RMB QDII products have income data. Among the 10 products with income data, ICBC Wealth Management has the highest yield on a private QDII product, with an annualized rate of return of 3.15% since the beginning of this year, Global Yuan and Fixed Income (QDII) 23GS8045 ranks second with an annualized yield of 3.14%, and CMB Wealth Management's Zhaorui and Dingsheng Gold Closed No. 14 (QDII) G ranks third with an annualized yield of 3.11% this year. The product also mainly invests in fixed income assets such as overseas deposits, with a term of about half a year, and the yield is higher than the domestic RMB deposit interest rate of the same term, and the China Merchants Bank APP shows that the current yield is relatively high and the interest rate of special deposits for 6 months is 1.7%.

4. Performance of non-QDII US dollar wealth management products: IB Wealth Management performed the best, with the yield of 2 products exceeding 7%, while the average yield of CMB Wealth Management and Shanghai Pudong Development Bank was low

The top yields of non-QDII US dollar wealth management products are concentrated in some banks, first look at the average yield of all non-QDII US dollar wealth management products of various banks or wealth management subsidiaries.

As of April 17, the average annualized rate of return this year reached 5.57%, and the average rate of return in the past year reached 5.16%. In addition, the related products of Bank of China Wealth Management and Everbright Wealth Management also performed very well. In contrast, the average yield of institutions such as CMB Wealth Management and Shanghai Pudong Development Bank is relatively low, and the yield of some US dollar wealth management products of CMB Wealth Management has even been negative since the beginning of this year, and SPD Bank has issued fewer US dollar products.

Since the beginning of this year, a number of US dollar products issued by IB Wealth Management have had a high annualized rate of return, most of which are Wanhuitong series products issued by IB Wealth Management, especially Wanhuitong No. 2 and No. 1 have performed well, and there are many products on No. 2 and No. 1, thus forming a "dominant" effect. Two of these products have an annualized rate of return of more than 7% since the beginning of this year, namely "Wanhuitong Huiying No. 2 C Section B" and "Wanhuitong No. 2 C US Dollar", which have annualized returns of 7.45% and 7.1% respectively since the beginning of this year. According to the 2023 Q4 report of "Wanhui Huiying No. 2 Section C B", the product mainly invests in Chinese investment-grade US dollar bonds. The top yield of Wanhui Tong Huiying No. 2 D, E and C are the same, the investment manager is Yu Jieya, and the product investment is mainly Chinese investment-grade US dollar bonds. Investment managers believe that the rise in Chinese dollar bonds is the main reason for the overall recovery in net product value in 2023.

Wind shows that the Market iBoxx Asian Chinese dollar bond index has been rising since November last year, and the rise has slowed down this year, but it still keeps rising. The China Bond - Investment Grade Chinese Dollar Bond Wealth (Total) Index also rose significantly in the fourth quarter of last year, but the increase has slowed significantly since the beginning of this year.

Since the beginning of this year, the second highest average yield is Beijing Bank Wealth Management, with an average yield of 5.5%. Goldman Sachs ICBC Wealth Management ranked third with an average yield of 5.3%. A total of 5 banks have an average yield of more than 5%, but the number of Ningyin wealth management products is small, and only 1 product has yield data.

Since the beginning of this year, the top non-QDII USD wealth management products also include three high-rated US dollar closed series products with global allocation, and Everbright Wealth Management's US dollar peace of mind plan (certificate of deposit strategy) 2 and 4, with annualized yields of more than 5.6% since the beginning of this year. The former invests in domestic and foreign money market instruments, including cash and bank deposits. The latter mainly invests in certificates of deposit and deposit-like assets, and prefers low-risk assets.

The higher yield on foreign currency deposits is one of the supporting factors for such products to achieve higher returns, and since the US dollar has continued to raise interest rates to a high level, the interest rate on overseas US dollar deposits has often reached more than 4% or even higher. Previously, banks in Hong Kong and Macau launched preferential deposit interest rates of up to 6%-10% to attract new customers of the Cross-boundary Wealth Management Connect.

Evaluation Description: The QDII products in this evaluation are those with QDII related words in the product name.

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