Bank wealth management returns "backfire," with some experiencing an annualized return of -19.3% over the past month

Ask AI · Why do wealth management companies urge investors to hold patiently?

“Why are bank wealth management products showing losses every day, too?”

Recently, the overall decline in yields for bank wealth management products has left many investors feeling frustrated.

Several investors told the reporter from Beike Finance that the yields of the bank wealth management products they have invested in have recently experienced significant pullbacks. For some wealth management products, the decline in annualized yield over the past month has reached more than 10%.

It is understood that the products that saw large pullbacks in performance this time are mainly option-inclusive wealth management products, such as “fixed-income plus” and hybrid wealth management products, whose returns have generally been volatile.

In response to market volatility, multiple bank wealth management companies have issued “a letter to investors,” urging them to “stay steady and don’t panic.” One bank wealth management company noted that in the short term, international factors such as the situation in the Middle East, along with the fact that A shares are in a concentrated period for earnings releases, mean the market is facing a key turning point from being driven by policy expectations to being validated by fundamentals. In the short term, risk appetite may still face pressure, but in the long run, A shares remain worth looking forward to.

Annualized yield over the past month: -19.3% Some option-inclusive wealth management product returns saw significant pullbacks

“Everything in the stock market and the gold market has been losing money lately, and I didn’t expect my wealth management products’ returns to pull back so much, too.” Wang Tong, a resident of Beijing, has been feeling a bit down. She told the reporter from Beike Finance that her recent returns from various wealth management investments have not been ideal, and she can only “switch off the lights and eat noodles”—making do with little. She thought the relatively steady bank wealth management products could still hold their returns, but the yield rates over the past month for each of the wealth management products she invested in are all negative.

She showed the reporter from Beike Finance that she invested in a bank—an ESG-linked hybrid wealth management product at a certain state-owned bank. Over the past month (about one month), its range gain/loss was -1.48%, and its annualized return was -19.3%. For a 180-day hybrid wealth management product, its annualized yield over the past month was -3.93%, but the product’s stated performance comparison benchmark was 3.85%. Another 360-day fixed-income wealth management product had an annualized yield of -3.63% over the past month as well. In the product’s underlying assets, 0–10% is used to invest in stocks.

It isn’t only Wang Tong who got “stabbed in the back” by bank wealth management returns. On social media platforms, posts discussing pullbacks in bank wealth management yields have increased recently.

A Beijing investor told the reporter from Beike Finance that they invested in a hybrid product issued by a joint-stock commercial bank wealth management company. Over the past month, the range gain/loss was 1.46%, while the annualized return was -14.08%.

“The losses in bank wealth management are so big—why not put it in the stock market?” The investor said that they originally thought investing in wealth management products was like “not putting all your eggs in one basket,” but they didn’t expect it to be even lower in annualized return than what they get by investing in an EFT fund.

Senior financial regulatory expert Zhou Yiqin said that recently, net value fluctuations in some bank wealth management products have been relatively large, mainly due to deep adjustments in the stock and precious metals markets. The net value declines of equity and hybrid wealth management products have been obvious. In addition, fixed-income-enhanced products within the fixed-income product system were also affected to a certain extent because they contain equity positions. However, these types of products make up only a limited proportion of the overall scale of bank wealth management products, so risks have not spread widely.

Dong Shimiao, chief economist at Zhaolian, also pointed out that after experiencing several rounds of net value volatility, investors’ mindset has gradually become more mature, and their acceptance of wealth management net values has improved.

Bank wealth management companies issue statements: Market volatility leads to short-term pressure on net values of option-inclusive products

“Cross the short-term storm and wait for the market to rebalance and warm up.” In the face of the continued pullback in performance of bank wealth management, more than 10 bank wealth management companies, including ICBC Wealth Management, Agricultural Bank Wealth Management, BOCOM Wealth Management, and Zhenjiang Bank Wealth Management, have issued “a letter to investors,” urging investors to “stay firmly confident and hold on.”

For the current yield pullbacks, bank wealth management companies generally attribute them to short-term market volatility.

Agricultural Bank Wealth Management stated that recently, due to the repeated Middle East geopolitical situation and sudden shifts in macro expectations, global major financial markets have seen volatility to varying degrees, which has caused short-term pressure on the net values of option-inclusive products.

Zhejiang Bank Wealth Management said that market adjustment is the result of multiple factors interacting and resonating together. At the macro level, uncertainty remains regarding the growth prospects of major global economies and the path of monetary policy, posing challenges to the pricing logic of various markets. The persistence of geopolitical conflicts directly impacts energy, supply chains, and global risk appetite, leading to a rise in investors’ risk-avoidance sentiment. Asset prices become more correlated, so traditional diversified allocations are more likely to be affected to some extent in the short term. When these factors overlap, the market shows a relatively rare pattern of the stock and bond market moving with synchronized volatility.

ICBC Wealth Management believed that in the short term, the situation in the Middle East remains complex and hard to predict, and core factors such as oil prices have been volatile. Investors may wait to make decisions after receiving signals that geopolitical tensions have cooled. Currently, A shares are approaching a concentrated period for earnings disclosures, and the market is facing a key transition from “driven by policy expectations” to “validated by fundamentals.” Risk appetite may continue to face pressure, and short-term volatility may also persist.

Data show that the market has continued to be volatile recently. Last week, the A-share market experienced a notable round of pullback. At the close on March 27, the Shanghai Composite Index was at 3889.08 points, with a single-day drop of 1.09%, and it fell back below the 3900-point level. The Shenzhen Component Index and the ChiNext Index also performed weakly, down 1.41% and 1.34%, respectively, and overall market sentiment was more cautious.

“The market’s core contradiction is not a fundamental deterioration in fundamentals, but rather an added effect between the risk-avoidance sentiment caused by geopolitical conflicts and the tightening of the global liquidity environment.” BOCOM Wealth Management believes that the market is still in a stage of risk release and liquidity games. Short-term volatility is unavoidable, but it has not shaken the underlying capacity of global markets to recover and repair.

Patience is needed to get through the cycle. Wealth management firms urge investors not to blindly bottom-fish or cut losses

Short-term sharp volatility has disrupted bank wealth management performance, but in the long and medium term, bank wealth management companies generally believe that returns are still worth expecting, and investors should not blindly bottom-fish or “cut losses.”

“More than this adjustment is a stage-wise correction under a resonance of tightened liquidity and sentiment disturbances, not a reversal of the fundamental trend. Investors don’t need to be overly fearful.” Huimin Bank Wealth Management stated that from the perspective of domestic fundamentals, the economy still has a certain degree of resilience. At the policy level, the steady-growth orientation also continues. The market is gradually shifting from the previous “liquidity-driven” mode to a “earnings-driven” mode, and “shaking out and consolidating” is a necessary step in the market switch process. Whether the market can stabilize afterward mainly depends on whether the Middle East situation and oil prices can ease, and whether the domestic capital negative feedback chain can gradually come to an end.

For equity-type assets, Northern Bank Wealth Management believes that although they have adjusted somewhat in the short term due to sentiment, in the long run, the value of high-quality listed companies will ultimately return to the fundamental drivers of their earnings growth. The current turbulence is, in essence, a re-sorting of asset prices, providing rational investors with opportunities to position at lower levels.

“Market volatility is the norm, and rationality and patience are the key forces to get through the cycle.” ICBC Wealth Management advised that investors should anchor to a long-term perspective, not be disturbed by short-term sentiment, and reasonably grasp the timing and rhythm of their allocations.

Regarding future investments, Dong Shimiao said that commercial banks and wealth management companies should pay more attention to drawdown control, such as setting strict drawdown targets and building tiered drawdown mechanisms, to improve product robustness under extreme conditions. At the same time, efforts should be made to shift the performance comparison benchmark toward an index-linked type, moving from “competing on benchmarks” back to “competing on investment research and portfolio management capabilities.”

Zhou Yiqin also suggested that investors should abandon short-term sentiment-driven actions. They don’t need to be overly anxious or blindly follow the crowd to redeem due to stage-wise net value drawdowns. Instead, they should plan and allocate reasonably based on their own capital usage cycle and risk tolerance. They should not put short-term turnover funds into high-volatility categories and should prioritize choosing wealth management products that match their personal risk preferences.

Beijing News Beike Finance reporter Jiang Fan Editor Chen Li Proofreader Liu Baoqing