1. Financial news
The self-discipline mechanism for interest rate pricing has stopped manual interest replenishment on deposits, and prohibited disguised high-interest solicitation of deposits.
The new version of the Cross-boundary Wealth Management Connect business performed well, with more than 20,000 new individual investors in the Guangdong-Hong Kong-Macao Greater Bay Area in March.
2. Earnings performance
The progress of the restoration of the net value of wealth management products with rights has slowed down. In April 2024, the average net value of existing wealth management products increased by 0.33%, an increase of 0.04 percentage points from the previous month. From the perspective of investment nature, the net value of various types of wealth management products continued to grow, but the marginal trend was differentiated. The recovery progress of the net value of wealth management with rights slowed down, the growth of the net value of fixed income wealth management accelerated, and the growth rate of the net value of equity and fixed income wealth management products decreased by 0.94 and increased by 0.08 percentage points respectively from the previous month.
3. Broken net
The net failure rate continued to refresh a new low in the past two years. According to the statistics of Puyi Standard, as of the end of April 2024, the cumulative net value of existing wealth management products was 2.67%, down 0.26 percentage points from the previous month. Compared with March, the cumulative net value breaking rate of fixed income, hybrid, equity, commodity and derivatives wealth management products decreased by 0.10, 2.83, 1.48 and 1.72 percentage points respectively.
4. New products
The number of new products shrank month-on-month. In April, fixed income wealth management was the main product category among the newly issued wealth management products, accounting for 98.79% of the total fundraising scale. The average performance benchmark interest rate of wealth management products continued to decline, and the average performance benchmark interest rate of newly issued wealth management products in April was 3.12%, down 0.07 percentage points from March 2024.
5. Scale of existence
After the cross-quarter, deposit funds flowed back to wealth management products, and the degree of capital return was higher than the level of the same period in the previous two years, and the scale of wealth management increased significantly at the end of April, and the scale of wealth management reached a new high since 2023. In terms of product categories, cash management and fixed income products mainly undertook the return of deposits, which increased by 0.91 trillion yuan and 1.54 trillion yuan respectively from the end of last month. In terms of the types of institutions, the proportion of stock products of wealth management subsidiaries of large state-owned banks has increased significantly.
1. Financial news
1. The self-discipline mechanism for interest rate pricing suspends manual interest replenishment on deposits and prohibits disguised high-interest solicitation of deposits[1]
On April 13, the reporter of the Financial Associated Press learned that the self-discipline mechanism of market interest rate pricing recently issued the "Initiative on Prohibiting the Cultivation of Deposit Market Competition Order through Manual Interest Replenishment and High Interest Solicitation", which clearly pointed out that some banks have broken through the authorized upper limit of deposit interest rates in disguise through manual interest supplements, which has directly weakened the effect of the market-oriented adjustment mechanism of deposit interest rates and seriously disrupted the market competition order. The "Initiative" requires all member units to strengthen the internal management of the deposit business and improve the internal control mechanism of the deposit business. Under the guidance of the People's Bank of China, the interest rate self-discipline mechanism includes illegal manual interest payments in the assessment of pricing behavior. After the issuance of the initiative, the violation of collecting savings through manual interest rate replenishment and high interest rates will be deducted in the evaluation of pricing behavior until one vote is vetoed, and the members of the interest rate self-discipline mechanism will be named and notified.
2. The new version of the Cross-boundary Wealth Management Connect business performed well: more than 20,000 new individual investors in the Guangdong-Hong Kong-Macao Greater Bay Area were added in March[2]
Cailian News Agency on April 27, the Guangdong Branch of the People's Bank of China released a circular on the cross-border wealth management connect business in March 2024 on April 23. Statistics show that in March, 24,288 new individual investors participated in the "Cross-boundary Wealth Management Connect" in the Guangdong-Hong Kong-Macao Greater Bay Area, an increase of 916% month-on-month, and the number of new account openings in a single month reached a new high. To tie in with the implementation of the new version of the Cross-boundary Wealth Management Connect, the pilot banks have been actively launching competitive products, with up to 10% of short-term USD time deposit products abounding. In the eyes of industry insiders, the outstanding business performance of the new version of "Cross-border Wealth Management Connect" is, on the one hand, the large demand for cross-border wealth management and the "opening of the gate" effect. On the other hand, banks have launched high-yield products and preferential activities to seize the opportunity to capture high-quality customers in the Greater Bay Area.
2. Earnings performance
2.1 Performance of major assets
In April, the trading logic of domestic and foreign markets diverged. The trend of assets in the domestic market is characterized by loose trading, with the bond market declining at the short end and stable at the long end. The stock market is generally rising, and growth is better than value. Overseas markets continued to trade in reflation expectations, stocks and bonds fell, and gold commodities strengthened.
In terms of the domestic bond market, on the supply side, the State Council Information Office pointed out that the preliminary screening of special bond projects this year has been completed, and the 1 trillion special treasury bonds will be organized and implemented after approval. On the capital side, the central bank stated that there is still room for future monetary policy. Affected by the above news, the short-end of the bond market strengthened, and the long-end pulled back slightly. As of the end of the month, the yields of 1-year, 5-year and 10-year treasury bonds of China Bond changed by -2.97bp, -4.90bp and 1.27bp respectively.
In the overseas bond market, in the first half of April, the market further converged on the Fed's expectations for interest rate cuts due to stronger-than-expected U.S. non-farm payrolls and CPI data, and U.S. Treasury yields moved up smoothly. The yield on the 10-year Treasury note peaked at 4.74% during the month, up 54bp from the beginning of the month. At the end of the month, the yield on the 10-year Treasury note closed at 4.69%, up 49bp from the beginning of the month.
In the equity market, the weaker-than-expected GDP growth rate in the first quarter of the United States disclosed in late April eased investors' concerns about US dollar liquidity, and the accelerated return of northbound funds at the end of the month boosted market sentiment. Broad-based indices generally closed higher, with a relatively dominant growth style.
In the commodity market, concerns about the continued expansion of the Iran-Israel conflict subsided, and crude oil prices retreated rapidly in late April. Copper prices continue to move higher, driven by expectations of supply shortages. The wave of commodity price increases spread to the black series, and the price of rebar stopped falling and rebounded, rising 5.68% for the month. Gold was slightly weaker than Bitcoin after the catch-up was in place, and the price fell from its highs and closed slightly higher throughout the month.
In the foreign exchange market, the U.S. non-farm payrolls and CPI data were stronger than market expectations for three consecutive months, and the Fed officials' speeches turned hawkish to the margin, postponing interest rate cuts became a consensus, and they were open to interest rate hikes, and the dollar index rose strongly under the dual blessing of economic data and expectations of postponing interest rate cuts, reaching a maximum of 106.52. Most currencies depreciated against the US dollar. Driven by the central parity, the exchange rate of the US dollar against the RMB remained generally stable.
2.2 Distribution of Absolute Returns
According to available statistics, in April 2024, the average net value growth rate of existing wealth management products will be 0.33%, up 0.04 percentage points from March.
In terms of investment nature, in April, the average net value growth rate of cash management, fixed income, hybrid, equity, commodity and derivatives wealth management products was 0.17%, 0.33%, 0.50%, 0.94% and 1.30% respectively, which was -0.01, 0.08, 0.04, -0.94 and -0.33 percentage points respectively compared with March.
From the perspective of product types, the highest monthly net value growth rate is short-duration equity wealth management products, with a monthly net value growth rate of less than 1 month, 1 month-3 months, 3 months-6 months, 6 months-1 year, and 1 year-3 years. Among the fixed-income wealth management products, the long-term continued to outperform the short-term duration, and the monthly net value growth rate of fixed-income wealth management products with more than 3 years was the highest, at 0.46%.
The cumulative return (annualized) of the year was fixed income> equity> commodities and derivatives> mixed > cash management, and the annualized returns of the five types of wealth management products were 3.94%, 3.38%, 3.05%, 2.58% and 2.18% respectively this year, an increase of 0.29, 0.44, 30.09, 1.08 and 0.03 percentage points from the previous month.
From the perspective of short-term changes, in the past 1 month and the past 3 months, the income performance of weighted products has been better than that of fixed income, and the yield is ranked as commodities and derivatives> equity> hybrid> fixed income > cash management.
2.3 Performance Standards
According to the available statistics, as of the end of April 2024, the performance compliance rate of existing wealth management products (the annualized rate of return of the product since the beginning of the year exceeded the performance benchmark) was 80.39%. From the perspective of investment nature, the performance compliance rates of fixed income, hybrid, equity, commodity and derivatives wealth management products were 81.00%, 52.26%, 63.38% and 100.00% respectively. From the perspective of term type, the performance compliance rate decreases according to the duration length, and the performance compliance rate of daily open wealth management products is the highest, exceeding 90%.
In April, the average excess rate of return (the difference between the annualized rate of return since the beginning of the year and the annualized rate of return of the performance benchmark) of various wealth management products was 0.73%. From the perspective of investment nature, the average excess return (annualized) of fixed income, hybrid, equity, commodities and derivatives is 0.75%, -0.68%, 2.18% and 15.78% respectively.
2.4 Redemption at maturity
The yield on redemption at maturity remained stable. In April, the average yield on maturity of wealth management products was 2.89%, down 0.18 percentage points from March (3.07%). The yields at maturity of fixed income and hybrid wealth management products were 3.01% and 1.41% respectively, a change of -0.24 and 0.55 percentage points respectively compared with March.
The performance compliance rate of maturity and redemption rebounded. In April, the maturity and redemption performance compliance rate of wealth management products was 61.24%, up 4.38 percentage points from March. From the perspective of investment nature, the performance compliance rates of fixed income and hybrid wealth management products due in April were 63.23% and 29.21% respectively, a change of 4.41 and 5.95 percentage points from March.
Third, the net breakage
3.1 General
The net failure rate continued to refresh a new low in the past two years. According to the statistics of Puyi Standard, as of the end of April 2024, the number of net unit value of existing wealth management products was 1,844 (1,940 in the previous month), accounting for 3.17% (3.30% in the previous month). The cumulative net value of existing wealth management products was 1,410 (1,607 in the previous month), accounting for 2.67% (2.93% in the previous month), continuing to hit a new low since January 2022.
3.2 Distribution structure
From the perspective of investment nature, as of the end of April, the cumulative net value failure rates of fixed income, hybrid, equity, commodity and derivatives wealth management products were 1.17%, 24.99%, 46.61% and 82.76%, respectively, ranking 20.0%, 45.0%, 92.5% and 92.5% since the beginning of 2021. Compared with March, the cumulative net value breaking rate of fixed income, hybrid, equity, commodity and derivatives wealth management products decreased by 0.10, 2.83, 1.48 and 1.72 percentage points respectively.
From the perspective of term type, the net breaking rate of long-term wealth management decreased significantly, and the cumulative net value of wealth management products of 1-3 years and more than 3 years decreased by 0.47 and 0.81 percentage points respectively from the previous month. The cumulative net value of 1-3 month wealth management products increased by 0.28 percentage points from the previous month, and the net failure rate of wealth management products with other maturities was relatively stable.
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 0.28 and 0.26 percentage points respectively compared with March, ranking at 30.0% and 32.5% respectively since the beginning of 2021.
From the perspective of institutional types, the cumulative net value of state-owned banks' wealth management products decreased by 6.67 percentage points, the cumulative net value of joint-stock banks increased by 1.86 percentage points, and the cumulative net value of wealth management products of other financial institutions was roughly the same as that of the previous month.
Fourth, new products
4.1 Product Scale
The number and scale of new products shrank month-on-month. According to the statistics of Puyi Standard, in April 2024, 2,524 new wealth management products were issued, raising 307.2 billion yuan. The number of issuances and the scale of funds raised decreased by 65 and 108.2 billion yuan respectively from March.
From the perspective of investment nature, the new products are mainly fixed-income wealth management. In April 2024, 2,430 new fixed-income wealth management products were issued, raising a total of 303.4 billion yuan, accounting for 98.79%.
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 37.69%, 20.93%, and 33.28% 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 290.2 billion yuan and 17 billion yuan respectively, accounting for 94.47% and 5.53% respectively, and the proportion of fund-raising scale decreased by 1.45 and increased by 1.45 percentage points respectively from the previous month.
From the perspective of issuers, the newly issued wealth management products are mainly issued by wealth management companies, urban commercial banks and rural financial institutions, and the total funds raised by the three types of institutions are 267.2 billion yuan, 26.5 billion yuan and 12.1 billion yuan respectively, accounting for 86.99%, 8.64% and 3.93% respectively, and the scale accounts for -1.31, 1.15 and 0.27 percentage points respectively compared with the previous month.
4.2 Performance Benchmarks
The average performance benchmark interest rate continued to decline. In April 2024, the benchmark interest rate on the average performance of newly issued wealth management products was 3.12%, down 0.07 percentage points from the previous month.
From the perspective of investment nature, the benchmark interest rate for fixed income products continued to decline, and the benchmark interest rate for hybrid performance rebounded slightly. In April 2024, the benchmark interest rates for the average performance of newly issued fixed income and hybrid wealth management products were 3.12% and 3.68%, down 0.06 and up 0.2 percentage points respectively from the previous month.
From the perspective of term type, in April 2024, the average performance of new wealth management products issued for more than 3 years will be 2.58%, 2.75%, 2.84%, 2.93%, 3.11%, 3.39% and 3.84% respectively, with changes of -0.19, -0.06, -0.06, and -0.06 from the previous month, respectively. 0.03, -0.09, -0.08, -0.12 percentage points.
From the perspective of operation mode, in April 2024, the average performance benchmark interest rates of new products issued by closed-end and open-end wealth management products were 3.13% and 3.04% respectively, a change of -0.07 and -0.05 percentage points from the previous month.
5. Scale of existence
5.1 General
After the cross-quarter, deposit funds flowed back to wealth management products, and the degree of capital return was higher than the level of the same period in the previous two years, and the scale of wealth management increased significantly at the end of April, and the scale of wealth management reached a new high since 2023. According to the statistics of Puyi Standard, as of the end of April 2024, the total number of existing wealth management products was 41,341, with a total scale of 28.53 trillion yuan, an increase of 345 and 2.45 trillion yuan respectively from the previous month.
From the perspective of monthly changes, in April 2024, the net growth of wealth management products was better than the level of the same period in previous years, and the product scale increased by 2.45 trillion yuan month-on-month. In contrast, the same period in 2023 and 2022 will increase by 1.26 and 1.54 trillion yuan month-on-month.
5.2 Distribution structure
In terms of investment nature, cash management and fixed income products mainly undertake the return of deposits. As of the end of April 2024, the total scale of cash management and fixed income wealth management products was 8.57 trillion yuan and 19.22 trillion yuan, an increase of 0.91 trillion yuan and 1.54 trillion yuan respectively from the end of the previous month. The total scale of the two types of wealth management products accounted for 97.42% of the total scale of wealth management, an increase of 0.73 percentage points from the end of the previous month. The scale of mixed, equity, commodity and derivatives wealth management products was 0.58 trillion yuan, 0.04 trillion yuan and 0.08 trillion yuan respectively, an increase of 5 billion yuan, a decrease of 1.8 billion yuan and a decrease of -50 million yuan respectively from the end of the previous month.
In terms of maturity types, the daily open-ended and short-duration wealth management products had a larger inflow than the previous month. As of the end of April 2024, the stock of daily open-ended, less than 1 month (inclusive), 1 month to 3 months (inclusive), and 3 months to 6 months (inclusive) had a net increase of 1,368.7 billion yuan, an increase of 534.3 billion yuan, an increase of 162.9 billion yuan, and an increase of 247.6 billion yuan respectively in the month.
In terms of operation mode, the inflow of open-end net worth products is relatively large. As of the end of April 2024, the scale of open-end and closed-end net-worth wealth management products increased by 2,255.7 billion yuan and 193.7 billion yuan respectively from the previous month, accounting for 79.13% and 20.20% of the stock scale respectively, accounting for an increase of 1.23 and a decrease of 1.15 percentage points respectively compared with the end of the previous month.
In terms of the types of institutions, the proportion of stock products of wealth management subsidiaries of large state-owned banks has increased significantly. As of the end of April 2024, the stock of wealth management products is mainly issued by wealth management companies, and the scale of stock wealth management products of large state-owned banks, joint-stock banks, urban commercial banks, rural financial institutions, foreign-funded banks, wealth management subsidiaries of large state-owned banks, wealth management subsidiaries of joint-stock banks, wealth management subsidiaries of urban commercial banks, wealth management subsidiaries of rural commercial banks, and wealth management subsidiaries of joint venture wealth management accounts for 0.41%, 1.15%, 7.62%, 3.40%, 0.10%, 31.56%, 42.84%, 9.67%, 0.42%, and 0.22% respectively. Compared with the end of the previous month, the changes were -0.05, -0.11, -0.58, -0.27, -0.01, 1.91, -0.32, -0.36, -0.03 and 0.01 percentage points respectively.
Annotation:
[1] 资料来源：财联社，《利率定价自律机制叫停存款手工补息 禁止变相高息揽储》，2024/4/13[2024/5/10]，https://baijiahao.baidu.com/s?id=1796221871209363023&wfr=spider&for=pc
[2] Source: Cai Lian Press, "The New Version of the Cross-boundary Wealth Management Connect Business Performs Brilliantly: More than 20,000 New Individual Investors in the Guangdong-Hong Kong-Macao Greater Bay Area in March", 2024/4/27[2025/5/10], https://baijiahao.baidu.com/s?id=1797429894023156211&wfr=spider&for=pc
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