Core Viewpoint - The asset management industry in China is poised for significant growth and transformation, driven by macroeconomic recovery and evolving investor preferences, as highlighted in the recent report on the asset management market for 2024-2025 [1][8]. Group 1: Economic Context - The Chinese economy has shown a strong recovery, with a GDP growth rate of 5.4% in Q4 of the previous year and maintaining the same growth rate in Q1 of this year, surpassing both last year's performance and the government's target of around 5% for the year [4][6]. - The government is implementing proactive fiscal policies and moderate monetary policies to stimulate internal demand and address external challenges, focusing on urban renewal and structural reforms [6]. Group 2: Asset Management Industry Insights - The asset management market in China is expected to reach a scale of 154 trillion yuan by the end of 2024, marking a 10% increase from the beginning of the year, with various segments such as bank wealth management, public funds, and insurance asset management all showing significant growth [8][10]. - The report indicates that bank wealth management products are shifting towards more stable, fixed-income products, with a 73% allocation in this category, while public funds are increasingly favoring index products, which have seen a growth rate exceeding 70% [8][10]. Group 3: Strategic Recommendations for Asset Management Firms - Asset management firms should leverage their strong asset allocation capabilities and diverse investment strategies to navigate the low-interest-rate environment and market volatility [7]. - Emphasis on technological innovation is crucial, as advancements in fintech are transforming the asset management landscape, enhancing client interaction, research analysis, and risk management [7][14]. - Firms are encouraged to develop comprehensive platforms that offer diversified investment options and enhance their ability to meet the evolving wealth management needs of investors [10][11]. Group 4: Brand Development and Client Engagement - 光大理财 has introduced a new brand slogan, emphasizing its commitment to understanding and meeting client needs, while also enhancing its product offerings to cater to diverse investor preferences [16][17]. - The company has established a systematic investment architecture and a comprehensive client service system to ensure effective management of products and investor relations [16][17].

Market Overview - The bond market is experiencing a tightening of funds, with short-term yields declining and slight adjustments in long-term yields. As of May 16, the weighted average of DR007 was 1.64%, and the yield on 10-year government bonds closed at 1.68% [2] - In the stock market, the Hang Seng Index, Hang Seng Tech, and ChiNext Index saw weekly increases of 2.09%, 1.95%, and 1.38% respectively, with the beauty care, non-bank financials, and automotive sectors leading the gains [2] Break-even Situation - The number of underperforming wealth management products continues to decrease. As of May 18, 2025, there were 23,379 active public wealth management products, with 149 having a cumulative net value below 1, resulting in a comprehensive break-even rate of 0.64% [3] - The break-even rates for various investment categories remained relatively stable, with equity and mixed products at 52.63% and 6.93% respectively, while fixed income products had a break-even rate of 0.19% [3] New Product Issuance - A total of 356 wealth management products were issued by 31 companies from May 12 to May 16, with joint-stock banks leading in issuance. Huaxia Wealth and Xingyin Wealth each issued 32 products [4] - The newly issued products primarily consisted of R2 (medium-low risk), closed-end net value type, and fixed income public products, with mixed products totaling 8. Notably, the "Jinghua Huiying Qiu Series Ruiying 13M" from Beiyin Wealth is highlighted for its investment strategy [4] Product Pricing - The performance benchmark for newly issued products with a duration of over one year continues to decline, with an average benchmark of 2.69% for newly issued fixed income products, and several products having benchmarks below 2% [5] - The "ESG Preferred Stable Direct Train" from Bank of China has a benchmark of only 1.85%, focusing on fixed income assets and utilizing ESG investment principles [5] Yield Situation - All categories of RMB public wealth management products reported positive average yields last week, with fixed income products showing an average net value growth rate of 0.0879% [6] - The average weekly yield for cash management products in RMB, USD, and AUD was 1.495%, 3.945%, and 3.08% respectively [7] Industry Trends - The Shanghai Stock Exchange held a special training session for wealth management companies to promote equity fund entry, aiming to enhance the role of ETFs in attracting long-term funds [8] - The scale of bank wealth management has rebounded, surpassing 31 trillion yuan, driven by rising yields in the bond market and a shift in deposit strategies [9]

Core Viewpoint - The average performance benchmark for newly issued open-ended wealth management products has dropped to 2.04%, while closed-end products have decreased to 2.59%, indicating a significant decline in returns due to falling bond yields [1][2]. Group 1: Performance Benchmark Trends - As of April 20, 2023, 624 new wealth management products were launched, with 208 being open-ended (average benchmark 2.04%) and 416 closed-end (average benchmark 2.59%), reflecting a week-on-week decline of 0.04 and 0.06 percentage points respectively [2]. - Since the beginning of 2023, the average performance benchmark for open-ended products has fallen from 4.01% to 2.04%, a decrease of nearly 200 basis points, while closed-end products have dropped from 3.84% to 2.59%, a decline of 125 basis points [2]. Group 2: Factors Influencing Decline - The continuous decline in performance benchmarks is attributed to two main factors: the low yields on government bonds (10-year yield at 1.66% and 1-year yield at 1.45%) making higher returns difficult, and wealth management companies adjusting benchmarks to lower investor expectations [2]. - The Central Committee's proposal for potential interest rate cuts may further reduce bond yields, impacting the performance benchmarks of wealth management products [2]. Group 3: Market Dynamics and Challenges - The widening gap between the performance benchmarks of open-ended and closed-end products has increased from 32 basis points to 55 basis points over the past year, indicating a growing disparity in returns [4]. - Open-ended products, which are more sensitive to interest rate changes, have experienced a larger decline in benchmarks compared to closed-end products, which have a time lag in adjustments due to their locked-in nature [4]. Group 4: Investment Strategies and Recommendations - In response to declining expected returns, industry experts recommend adopting multi-asset and multi-strategy investment approaches, focusing on absolute return strategies while managing risk and volatility [6][7]. - Wealth management companies are encouraged to innovate product offerings in areas such as retirement planning, green finance, and technology finance, while utilizing digital tools for better customer risk profiling [7].