The smart investment products of China Merchants Bank, Agricultural Bank, and Industrial and Commercial Bank of China have achieved good results but recently announced the suspension of subscriptions.


  Why did robo-advisors press the pause button?

  On December 12, a reporter from the Beijing Youth Daily discovered that China Merchants Bank Capricorn Intelligent Investment, Agricultural Bank of China Agricultural Bank of China Intelligent Investment, and Industrial and Commercial Bank of China AI Investment have recently issued announcements to suspend product purchase functions.

A reporter from the Beijing Youth Daily found that the current performance of the smart investment portfolios of various banks is generally good. This adjustment is not due to poor performance, but to meet regulatory requirements.

  One-click order to buy more than a dozen funds

  Robo-too combination saves worry for "lazy people"

  The so-called robo-advisor is a bank's asset allocation advice service for individual investors, that is, the bank first understands their investment and wealth management requirements and risk tolerance through customer risk assessment and questionnaire answers, and then uses big data, artificial intelligence, and professional quantitative models. And other technologies, to recommend suitable investment portfolios to customers for individual investors as a reference for asset allocation.

  In theory, all products sold by banks can be included in the robo-advisor product portfolio, but at present, most of the products of the bank's robo-investment portfolio are public funds sold on its behalf.

  China Merchants Bank Capricorn Intelligent Investment claims to "start from asset allocation, optimize fund portfolios, make timely and dynamic adjustments, and provide matching fund portfolios to investors with different risk preferences."

Capricorn Smart Investment selects carefully selected funds from more than 6000 funds on the fund platform of China Merchants Bank to solve the difficulties of investors in choosing a "base".

  The ICBC AI Investment Service Agreement also claims that it is a fund portfolio investment service provided to investors through the ICBC agent sales fund system.

  It is understood that the bank's intelligent investment business will provide three to five products with different risk levels. The combination of different risk categories will allocate different proportions of currency funds, stock funds, hybrid funds, bond funds, commodity funds, etc., and each type of fund will also Choose several funds, so there are often more than a dozen or more than twenty funds in a robo-advisor portfolio.

  Investors' purchase of smart investment portfolios is also the same as buying other wealth management products and funds. One-click orders can be purchased. Of course, risk assessment must be completed before then.

  Ms. Wang, who has bought smart investment products in many banks, said that it is difficult to choose thousands of funds in the market. She is always afraid of choosing the wrong funds.

The biggest advantage of the banking robo-investment business is that it saves the worry of "lazy people", "It has been selected for you, and it will be adjusted according to market changes. After I buy it, I don’t have to worry about it at all. And one order is equivalent to buying. Many funds feel less risky."

  Three banks recently announced

  Suspension of robo-investment business subscription

  At the end of 2016, China Merchants Bank launched "Capricorn Smart Investment" and became the first bank to pilot robo-advisors.

According to Capricorn Intelligent Investment's latest announcement, Capricorn Intelligent Investment has served more than 200,000 customers and accumulated sales of more than 14 billion yuan.

However, China Merchants Bank recently pressed the "pause button" for Capricorn Smart Investment.

  "Thank you for your trust, and be with you all the way." On December 10, the Capricorn management team of CMB issued an open letter to all Capricorn IP holders. The letter stated, "At present, in order to comply with regulatory requirements, China Merchants Bank has suspended Capricorn Intelligence. The purchase function of the investment, but the redemption and adjustment transactions of the original position customers will not be affected, and the existing customers can continue to hold them with confidence."

At the same time, the purchase button for Capricorn products has turned gray.

  On December 4th, ICBC also issued a “Friendly Reminder” to customers stating that it is in the process of standardizing and reforming Al investment products. From December 4, 2021, the purchase transaction of Al index, Al intelligent investment and AI strategy products will be suspended, and existing customers will redeem it. Return and repositioning transactions will not be affected, and there is a risk that the service will not be able to be continuously provided in the future.

  Yesterday, a reporter from the Beijing Youth Daily logged into the ABC’s mobile banking and clicked on the ABC Smart Investment. A “warm reminder” popped up on the page: “According to the latest regulatory regulations, the Bank will suspend the purchase and position adjustment functions of the ABC Smart Investment. During the suspension period, The portfolio you hold will not be affected, and the redemption function can be performed normally. Please rest assured that you can hold it. If there is any service change in the future, our bank will notify you in time so that you can make investment arrangements."

  Low volatility and steady growth

  Bank robo-investment performance is good

  These banks are now announcing the suspension of subscriptions. Is it because the poor performance of the bank's intelligent investment business has been abandoned by the market?

Judging from the performance of the publicly released portfolios of various banks, this is not the case.

  On November 29 this year, China Merchants Bank released the Capricorn Smart Investment October 2021 Operation Report, which showed that since the operation on December 6, 2016, as of the end of October, the cumulative return of the stable return portfolio with the lowest risk level was 24.98%, and the risk level was in the middle. The cumulative return of the flexible configuration portfolio of the company was 44.73%, and the cumulative return of the cross-bull-bear portfolio with the highest risk level was 70.05%, which better achieved the goal of low volatility and stable growth.

  Ms. Wang told the Beijing Youth Daily that she had purchased the Capricorn Smart Investment Flexible Allocation Portfolio at the end of November last year. At that time, she only wanted to have a higher yield than ordinary bank wealth management products.

Now just after a year, Ms. Wang invested 20,000 yuan last year, and the holding income was 1,583.33 yuan, and the annualized rate of return exceeded 7%. At present, the rate of return of bank wealth management products is difficult to exceed 5%.

  From the performance chart, the performance of this combination has basically been above the performance benchmark since its establishment, especially after the end of March last year, the distance beyond the performance benchmark has been increasing.

  ICBC's AI investment performance is also good.

The medium-risk ICBC stock mixed portfolio has risen 3.51% in the past March, 17.59% in the past year, and 137.43% in the past three years; the lower-risk ICBC portfolio has a return of 6.53% in the past year .

  Bank of China Huitou No. 11 is suitable for enterprising investors. As of December 9, its growth rate in the past year was 12.9%, and its performance benchmark was 9.03%. In this portfolio, equity investments accounted for 50%, and fixed income investments accounted for 40%.

  It is not difficult to see that although the performance of the bank's intelligent investment business is not as good as the doubling of the income of a few star funds, it still has a greater advantage over the yield of ordinary bank wealth management products. The key is to save investors' peace of mind.

  Tighter supervision of fund investment advisory

  Bank suspends subscription to meet regulatory requirements

  Since the performance is good and the market has gradually recognized it, why have banks recently suspended the purchase of robo-investment business?

Various banks have stated that this is to meet regulatory requirements.

  ICBC, China Merchants Bank and Ping An Bank are the only three banks among the 60 institutions that have obtained the pilot qualification for fund investment advisory. It has been nearly two years since they obtained the pilot qualification in February 2020.

  In the field of fund investment advisory business, regulatory authorities have recently issued consecutive regulatory documents.

These include the "Notice on Regulating Fund Investment Recommendation Activities" (hereinafter referred to as the "Notice") issued by the Securities Regulatory Bureau of Beijing, Shanghai and Guangdong to fund companies and fund sales institutions within their jurisdictions (hereinafter referred to as the "Notice"). "Guidelines on the Content and Format of Investment Consultancy Service Agreements for Publicly Offered Securities Investment Funds (Consultation Draft)" and "Guidelines on the Contents and Formats of Investment Consultancy Service Agreements for Publicly Offered Securities Investment Funds (Consultation Draft)", as well as supervisory authorities’ "Guidelines for Public Offering of Securities Fund Investment Advisory Service Performance and Customer Asset Display (Draft for Solicitation of Comments)" issued by fund investment advisory institutions.

  The "Notice" requires institutions not to carry out new activities that do not comply with the "Pilot Notice" to provide fund investment portfolio strategy recommendations, including not to display or launch new fund investment portfolio strategies, and not to add new customers to the online fund portfolio strategies, and not to allow stocks Clients add additional portfolio strategy investment.

  The "Guidelines for Publicly Offered Securities Investment Fund Investment Consultancy Service Performance and Client Asset Display (Draft for Solicitation of Comments)" has made very detailed requirements for service performance display, responsibility boundaries and specific display indicators, etc., which not only regulates the fund investment portfolio strategy Performance display indicators and fund service evaluation indicators also further stipulate and refine the calculation caliber of the indicators.

  Some insiders pointed out that under this circumstance, the banking department’s promotion of investment advisory services does “need to be suspended.” It is necessary to fully communicate with the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission on the relevant rules to clarify whether it can be done and how it can be done. , And then continue to advance.

  This group of articles / our reporter Cheng Jie

  Outlook

  The future of bank smart bidding may expand

  In addition to regulatory reasons, many people in the industry believe that banks may also be considering adjusting the positioning and operation of robo-advisory services.

  A person from the asset management department of a bank pointed out that, theoretically, the investment targets that bank intelligent investment can be involved in are very wide. In addition to public funds, bank wealth management, trusts, structured deposits, etc. can all be invested, while fund investment advisory products are limited to public funds and Related varieties recognized by the China Securities Regulatory Commission.

If banks only fully promote the pilot fund investment advisory business, the promotion and sales space of bank wealth management products, trust products, and structured deposit products may be greatly restricted.

  In fact, existing banks have made it clear that the investment scope of the smart investment business is not limited to public funds.

Bank of China Smart Investment recently upgraded, and specifically informed investors that the future portfolio may add agency-related asset management products such as agency wealth management, agency asset management, etc., so that customers can browse and confirm the latest agreement.

  A reporter from the Beijing Youth Daily saw that the Bank of China Smart Portfolio Service Agreement (2021 version) shows that the Smart Portfolio is an asset constructed by Bank of China based on certain investment strategies, product selection logic, and investment objectives, consisting of a number of consignment asset management products. Portfolio, among which, agency asset management products include the sale of public funds, personal wealth management products issued by wealth management companies, fund trust plans issued by trust companies, securities companies, securities company subsidiaries, fund management companies, fund management subsidiaries, and futures Asset management plans issued by companies, futures company subsidiaries, insurance asset management institutions, etc.

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