Core Views - The article emphasizes the importance of building a strong financial nation and the new historical mission for the wealth management industry, as outlined in the "14th Five-Year Plan" [1] Group 1: Wealth Management Industry Dynamics - Wealth management serves as a crucial link between the funding and asset sides, playing a vital role in providing financial services to the real economy and achieving inclusive finance [2] - The rapid growth of household wealth in China is accompanied by a significant internal structural adjustment, notably the trend of "deposit migration" from traditional bank savings to wealth management products, funds, and capital markets [4] - The current phase of deposit migration is seen as a necessary outcome of optimizing asset allocation in a low-interest-rate environment, with the trend expected to continue as market activity increases [5] Group 2: Factors Driving Deposit Migration - The fundamental change in the interest rate environment is identified as the core driver of the deposit migration trend, with current bank deposit rates significantly lower than those from 2019 to 2021 [6] - The total amount of deposits in China is approximately 1.5 times the total market capitalization of A-shares, indicating substantial potential for capital market inflows [6] Group 3: Balancing Client Expectations - Clients often express a desire for both high returns and low volatility, creating a mismatch with financial realities, which poses challenges for asset management institutions [7] - Solutions to this challenge include setting reasonable expectations and optimizing strategies, such as designing appropriate product structures to smooth short-term volatility [7] Group 4: Investor Education and Engagement - The concept of "investor companionship" is gaining traction, focusing on helping clients understand products and manage risks effectively, especially during market fluctuations [9] - Continuous and detailed investor engagement is crucial for smoothing client emotions and achieving long-term value [9] Group 5: Future Competitiveness in Wealth Management - The competition in the wealth management industry is shifting from scale expansion to a deep competition in core capabilities, including global asset allocation, digital operations, and professional talent [10] - Asset management institutions are encouraged to enhance their strategies and products to meet the growing demand for cross-border investments [10] Group 6: Long-term Value Creation - Key directions for the future include establishing a client-centered investment management system, improving service quality, and leveraging technology for business development [11] - The industry is entering a new growth era, where focusing on service, professional capabilities, and genuine client engagement will be essential for navigating challenges and creating long-term value [11]

Core Insights - The recent data from the People's Bank of China indicates a significant decrease in both household and corporate deposits, while non-bank deposits have increased, suggesting a shift in asset allocation rather than a true "migration" of deposits [1][3][8] Group 1: Deposit Trends - In October, household deposits decreased by 1.34 trillion yuan, and corporate deposits fell by 1.09 trillion yuan, while non-bank deposits rose by 1.85 trillion yuan [1] - The term "deposit migration" is deemed inaccurate as it reflects a reallocation of deposits among different entities rather than a net outflow [1][3] - The increase in non-bank deposits is attributed to the expansion of wealth management products and sustained trading activity in the stock market [3][8] Group 2: Wealth Management Products - "Fixed income plus" (固收+) products have gained popularity, with some achieving annualized returns of up to 7% [2][6] - The total market size for "fixed income plus" wealth management products is expected to grow by over 1.4 trillion yuan this year, contributing to an overall market size of 33.5 trillion yuan by 2025 [6] - The shift towards "fixed income plus" reflects a broader trend of investors seeking higher yields as traditional deposit rates decline [6][9] Group 3: Investor Behavior - There is a notable increase in the number of individual and institutional investors in wealth management products, with personal investors rising by 10.29 million in the first half of the year [4] - The risk appetite among investors has shown signs of recovery, reversing a four-year trend of declining risk tolerance [4][10] - Wealth management firms are adapting by diversifying their product offerings and enhancing risk management strategies to meet changing investor expectations [9][10] Group 4: Market Dynamics - The overall market for wealth management products reached 32.13 trillion yuan by the end of Q3, marking a year-on-year increase of 9.42% [8] - The transition towards "fixed income plus" is seen as a critical strategy for wealth management firms, although progress has been slow due to investor hesitance towards net asset value fluctuations [8][9] - Firms are increasingly incorporating equity assets into their "fixed income plus" products to enhance returns and attract a broader investor base [7][9]

Group 1: Real Estate Market - The real estate market has shifted, with not all properties being difficult to sell; properties in core urban areas can sell quickly, while those in third-tier cities struggle [5][6] - Since the second half of 2021, the real estate sector has been in deep adjustment, indicating that buying property is no longer a guaranteed profit strategy [6][8] - The demographic trend shows a slowdown in young population growth, leading to demand concentrating in cities with industry and population inflow, causing price declines in non-core areas [8] Group 2: Investment Products - The yield on investment products has significantly decreased, with previously common 8% returns now mostly around 2%, primarily due to liquidity issues in underlying assets like real estate and local government financing [10] - Regulatory changes have altered the investment landscape, making it essential to evaluate the underlying assets of financial products rather than just their yields [12] Group 3: Monetary Policy and Economic Outlook - Global monetary policies are shifting towards easing, with the U.S. Federal Reserve reducing rates from 5.25%-5.5% to around 4%, and further cuts expected, potentially bringing rates below 3% [14][16] - China's monetary policy is also transitioning to a moderately loose stance, with expectations of rate cuts and a focus on stabilizing economic growth around 5% [17] - Lower borrowing costs from reduced mortgage rates and corporate financing will positively impact capital markets and corporate profitability, supporting long-term stock market growth [19] Group 4: Investment Strategy Recommendations - Households are advised to reassess their asset allocation, as many have a high percentage of wealth tied up in real estate, which poses risks [21] - A suggested asset allocation strategy includes emergency funds, stable investments, and growth-oriented investments to avoid liquidity issues [23] - Success in the new investment environment relies on patience and adapting to policy changes rather than relying on outdated strategies [25]

Core Viewpoint - The trend of "deposit migration" among residents is increasing, with a significant shift of funds from traditional bank deposits to wealth management products and securities investments, driven by declining deposit rates and the attractiveness of financial markets [1][4][8]. Group 1: Deposit Trends - In August, new resident deposits increased by 110 billion yuan, a year-on-year decrease of 600 billion yuan, marking two consecutive months of negative growth [1]. - Non-bank deposits saw an increase of 1.18 trillion yuan in the same month, showing a substantial year-on-year growth despite a month-on-month decline [1]. - The trend of deposit migration is expected to continue, with an estimated scale of hundreds of billions of yuan moving into wealth management products over the next year [1][8]. Group 2: Corporate Wealth Management - Over the past year, listed companies have shown a structural change in their use of idle funds, with a decrease in the proportion of deposit products and a slight increase in bank wealth management and stock products [2]. - The total amount of wealth management products subscribed or planned by listed companies reached 3.734 trillion yuan, with 56.29% of this amount allocated to deposit products [2]. - The proportion of funds allocated to wealth management products has increased significantly, from 15.16% in the previous period to 28% in the current period [2]. Group 3: Investment in Securities - Some companies have increased their investments in secondary market stock-related products, with over 10 billion yuan invested in stock products in the past year [3]. - Companies like Liou Co. and Jilin Aodong have announced plans to invest significant amounts in securities, including new stock subscriptions and other investment activities [3]. Group 4: Market Conditions - The continuous decline in deposit rates has led to a lower yield on public deposits, with rates dropping to around 1% from over 3% in 2020 [6][8]. - The average annualized yield of bank wealth management products has reached 2.12%, creating a significant yield gap compared to deposit products [7][8]. - Asset management institutions are actively entering the corporate wealth management market, responding to the demand for safer and more liquid investment options [7][8].

Core Viewpoint - The trend of "deposit migration" among residents is increasing, with a notable decline in bank deposit products and a slight rise in wealth management and stock investments [1][5] Group 1: Deposit Trends - Resident deposits have decreased for two consecutive months, with an addition of 110 billion yuan in August, down 60 billion yuan year-on-year [1] - Non-bank deposits increased by 1.18 trillion yuan in August, showing significant growth compared to the same period last year [1] - The proportion of deposit products among listed companies has declined, with a shift towards wealth management and stock investments [2][3] Group 2: Wealth Management and Investment Shifts - Listed companies have announced a total of 373.4 billion yuan in wealth management investments over the past year, with a notable increase in the proportion of wealth management products [2] - The amount allocated to wealth management products reached approximately 589.94 million yuan, accounting for 28% of total investment, compared to 15.16% in the previous period [3] - Some companies are extending their investment targets to the primary market, indicating a diversification in investment strategies [4] Group 3: Market Conditions and Institutional Response - The continuous decline in corporate deposit rates and the recovery of the equity market are driving companies to reduce deposit sizes and increase wealth management and stock investments [5][6] - Recent adjustments in deposit rates have seen significant reductions, with major banks lowering rates across various terms [6] - The average annualized yield for bank wealth management products is now higher than that of deposit products, prompting a shift in investment strategies among companies [7][8] Group 4: Future Outlook - Companies are expected to continue reallocating funds from deposits to wealth management, with estimates suggesting a potential migration of several hundred billion yuan in the coming year [8] - The interest in overseas wealth management products is also growing, indicating a broader diversification in asset allocation strategies [8]

Group 1 - The core challenge for the banking sector is the downward trend in interest rates, which is expected to continue, impacting financial operations in China [2][3] - The phenomenon of "disintermediation" is emerging, where funds are flowing from banks to non-bank financial institutions and markets, indicating a positive shift in the financing structure favoring capital market development [3][4] Group 2 - Financial intermediaries, particularly banks, must undergo transformation in four key areas: 1. Transition from selling products to providing financial services, as many banks still operate in a traditional manner reliant on interest margins [5] 2. Development of asset management businesses to enhance direct financing efficiency, which is crucial for implementing central financial policies [5][6] 3. Strengthening asset trading operations through market mechanisms, leveraging advancements in technology such as digitalization and blockchain [6] 4. Promoting integrated operations to overcome the limitations of segmented business and regulatory practices [6] Group 3 - There is a significant opportunity for the capital market to develop, driven by declining interest rates and the disintermediation trend, which creates a favorable environment for asset management markets [7][8] - The focus of reform should be on converting household savings into corporate capital, as the capital market plays a central role in this transformation [7][8] Group 4 - The international economic landscape is undergoing profound changes, with a shift towards bilateral negotiations and a decline in the effectiveness of global governance mechanisms established post-World War II [9][10] - Despite external challenges, the resilience of the Chinese economy remains strong, with confidence in the ability to manage the impacts of tariffs and maintain a robust manufacturing and service sector [10][11]

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the trends in household deposits in China from 2017 to 2025, highlighting the impact of macroeconomic factors and regulatory changes on wealth allocation among residents [1][2][4]. Core Insights and Arguments - **Rapid Growth of Household Deposits**: From 2017 to 2022, household deposits grew rapidly, reaching a peak of 17.8 trillion yuan in 2022, with growth rates increasing from 1.1% to 17.4%. However, growth rates are expected to decline to around 10% by 2025 [1][2]. - **Drivers of Deposit Growth**: The primary drivers for the increase in deposits include a downturn in the real estate market and a decline in the returns on asset management products. Financial regulatory tightening has also led to a return of funds to bank deposits [1][4]. - **Shift in Investment Preferences**: As deposit rates decrease and capital market returns improve, residents are diversifying their investment preferences, favoring wealth management products and money market funds. Risk assets like bonds and stocks are expected to attract more funds due to enhanced relative returns in 2024 [1][6]. - **Regulatory Impact**: Financial regulatory policies have significantly influenced wealth allocation. The tightening of regulations and the implementation of new asset management rules have led to a reduction in the scale of various financial products, causing funds to flow back into bank deposits [5][10]. - **Asset Allocation Trends**: There has been a notable shift in asset allocation since 2017/2018, with a significant increase in cash deposits, which reached 85% by 2022. Although the investment ratio in financial products and asset management products has rebounded to 31% in 2024, it remains below the levels seen from 2014 to 2017 [7][8]. Other Important Insights - **Preference for Low-Risk Products**: Low-risk asset management products, such as bank wealth management and money market funds, are increasingly favored by residents due to their higher yields compared to deposits and better liquidity. The bond market's performance in 2023-2024 has also attracted some deposits into bond funds [9]. - **Future Monetary Policy Outlook**: The future monetary policy is expected to focus on stabilizing growth and the economy, with potential continued interest rate cuts. This is likely to enhance the comparative returns of various financial products, leading to an increased allocation of wealth into money market funds, wealth management, and bonds [10][11]. - **Emerging Trends in Wealth Migration**: Despite the overall decline in risk asset allocation since 2016, there are signs of emerging trends as the stock market improves, indicating a potential shift in risk appetite among residents [9][11].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The introduction of an ESG negative screening mechanism in the ChiNext Composite Index aims to promote high-quality development of the index [2] - The new Green Finance Directory clarifies the support direction for green trade and consumption, while a mandatory national standard for electric bicycles has been released to enhance product quality supervision [2][3] - The EU has simplified the application standards for sustainable finance classification, easing the reporting burden on small and medium-sized enterprises [3] - The ISSB has initiated the revision of the SASB sustainable development reporting standards to enhance compatibility and international applicability [3] Summary by Sections 1. Monthly Research Summary - The ChiNext Composite Index has introduced an ESG and risk dual exclusion mechanism to promote high-quality index development [2] - The latest Green Finance Directory has been released, clarifying the support direction for green trade and consumption [2] - A mandatory national standard for electric bicycles has been published to strengthen product quality supervision and accelerate battery recycling [2] - Various green electricity policies have been intensively introduced by central and local departments, covering multiple areas of development, issuance, and consumption [2] 2. Key Policy Tracking Domestic Policy Tracking - The ChiNext Composite Index has implemented a dual exclusion mechanism for ESG and risk, enhancing the quality and investability of index samples [24] - The People's Bank of China and other ministries have released a new version of the Green Finance Directory, which includes green trade and consumption projects for the first time [26] - A mandatory national standard for electric bicycles has been issued to strengthen product quality supervision and accelerate battery recycling [27] - Various departments have introduced green electricity policies, establishing a rigid constraint system for green electricity consumption [33] International Policy Tracking - The EU has simplified the application standards for sustainable finance classification, reducing the compliance burden for enterprises [3] - The ISSB has started revising the SASB sustainable development reporting standards to improve their applicability [3] 3. Market Data Tracking - In July 2025, the total issuance of ESG bonds in China reached 732.56 billion yuan, a year-on-year increase of 76.22% [4] - The global ESG fund market saw a net inflow of approximately 4.9 billion USD in Q2 2025, rebounding from a net outflow of 11.8 billion USD in the previous quarter [4][22] - The carbon market in China recorded a trading volume of 10.7554 million tons in July 2025, with an average transaction price of 73.24 yuan per ton [4]

Core Viewpoint - The bond market has shown a strong performance recently, with various fixed-income products experiencing growth in returns, particularly those with embedded options [2][3][11]. Summary by Sections Fixed Income Product Performance - In the past month, the bond market experienced fluctuations, with rates generally declining. Various stable products saw an increase in net value, especially option-embedded fixed income products, followed by medium- and long-term bond funds [3][9]. - As of June 18, the monthly returns for different products were as follows: option-embedded bond funds at 0.54% (previously 0.62%), medium-term bond funds at 0.31% (previously 0.13%), short-term bond funds at 0.18% (previously 0.19%), high-grade interbank certificates of deposit index funds at 0.15% (previously 0.18%), and cash management products at 0.11% (unchanged) [3][10]. Bond Market Review - The bond market showed a pattern of weakness followed by strength, influenced by market sentiment and liquidity conditions. The tightening of liquidity in late May, combined with the U.S.-China trade meeting in early June, initially suppressed bond market performance. However, after the month transitioned, the central bank's supportive stance on liquidity led to a recovery [11][12]. - The one-year AAA interbank certificate of deposit rate fell to approximately 1.65%, a slight decrease from the previous month, indicating a shift towards a more favorable liquidity environment [12][15]. Market Outlook - In the short term, the bond market is expected to maintain a low-interest, low-volatility trend, with the 10-year government bond yield projected to fluctuate between 1.5% and 1.8%, centered around 1.7% [31][34]. - Credit bonds are anticipated to outperform interest rate bonds, with credit spreads likely to remain relatively low, minimizing the risk of significant widening [34]. Asset Management Industry Trends - The scale of wealth management products increased to 31.3 trillion yuan by the end of May, reflecting a 1.6% month-on-month growth. This growth is attributed to the decline in bank deposit rates, which has made wealth management products more attractive [36]. - On May 23, the National Financial Regulatory Administration released a draft for asset management product information disclosure, allowing for more flexible performance benchmark disclosures, which may influence investor behavior in the long term [36]. Investment Strategy Recommendations - For investors needing liquidity management, maintaining cash-like products and considering stable low-volatility wealth management or short-term bond funds is advisable [39]. - For conservative investors, holding pure bond products with a potential extension of duration is recommended, especially as the 10-year government bond yield approaches 1.7%-1.8% [40]. - For more advanced conservative investors, continuing to hold fixed-income plus products is suggested, with a focus on incorporating convertible bonds and equity assets into the strategy [41].

Core Viewpoint - The joint release of the "Policies and Measures to Accelerate the Construction of a Science and Technology Financial System" aims to support high-level technological self-reliance through 15 policy measures across seven areas, including monetary credit, capital markets, and technology insurance [1] Group 1: Financial Support Mechanisms - The "345" science and technology financial service system includes a policy system, product supply system, and professional organization system, with a loan balance for high-tech enterprises reaching 17.7 trillion yuan, a 20% year-on-year increase [2] - Four pilot projects are designed to support technology enterprises in obtaining long-term and patient capital, including a financial asset investment company equity investment pilot with a signed intention amount exceeding 380 billion yuan [2][3] - The system emphasizes the roles of five types of financial institutions, with policy banks providing long-term, low-interest financing, and commercial banks focusing on technology innovation as a key support area [3] Group 2: Technology Insurance Development - Technology insurance serves as a "shock absorber" and "stabilizer" for key core technology breakthroughs and future industry development, with cumulative risk protection exceeding 1 trillion yuan since the pilot began [4] - Recent policy changes allow insurance funds to invest in unlisted equity of strategic emerging industries, with risk factors for investments in technology enterprises adjusted to enhance capital adequacy [4][5] - The financial regulatory authority is working on high-quality development policies for technology insurance to optimize the service system and enhance risk compensation and funding leverage [5] Group 3: Strengthening Financial Institutions - The "Policies and Measures" document is a comprehensive policy framework aimed at directing more financial resources towards technological innovation, enhancing the quality and efficiency of science and technology financial services [6] - Financial institutions are encouraged to integrate science and technology financial services into their strategic planning and establish independent management mechanisms [6][7] - There is a focus on developing a differentiated evaluation system for technology financial services, emphasizing technology talent and research capabilities, while promoting digital transformation in service operations [7]