Rate discounts are frequent, and some charging items are directly reduced to 0

Bank financing starts a "price war"

  Entering 2022, investors who are concerned about wealth management products will find that various banks and wealth management subsidiaries frequently release announcements of preferential rates for wealth management products, vying to attract customers with lower rates.

Since January, CMB Wealth Management, Everbright Wealth Management, Industrial Bank Wealth Management, Bank of Communications Wealth Management and many other bank wealth management subsidiaries have frequently issued announcements on rate adjustment, periodically reducing the rates charged for some of the wealth management products they issue or sell on an agency basis. Considerable: some rates are discounted by 50%, some are reduced to one-third of the original, and some charging items are directly reduced to 0.

  Industry insiders remind everyone that the management fees, sales fees and other expenses of wealth management products are "rigid expenses", and even when the principal of wealth management products suffers a loss, these expenses will not be reduced or exempted.

It should be noted that the rate information of wealth management products usually does not appear in the product poster, but is "hidden" in the product specification, which is easily ignored by investors.

When purchasing wealth management products, by "shopping around" and choosing products with lower rates, it is equivalent to improving investment returns to a certain extent.

50% off many products

  Since January this year, on January 28th and 29th, the product bulletin board on the official website of China Merchants Bank has issued more than ten announcements of preferential product rates, involving many of its wealth management products.

Many products have a 50% discount on the sales rate.

  On February 16th, Bank of Communications Wealth Management announced that Bank of Communications Wealth Management will provide a periodical discount on the sales fee rate from March 2nd (inclusive), and the sales fee will be reduced from 0.3%/ dropped to 0.2%/year.

Product management rates are mostly 3-8% off

  In addition to sales fees, some wealth management subsidiaries have also actively lowered product management fees, with discounts ranging from 30% to 20%.

For example, during the period from February 9 to August 8, the fixed investment management rate of “CMB Wealth Management Zhaorui Yiyangfengrun Three-Year Closed No. 4 Enhanced Fixed Income Wealth Management Plan” dropped from 0.30%/year to 0.10%/year years, only one-third of the original.

  On February 22, Everbright Financial Management announced that in order to better meet the financial needs of investors, it will carry out Sunshine Gold 15M Fengli Enhancement 7 from February 25, 2022 (inclusive) to May 25, 2023 (inclusive) Management fee discounts for future wealth management products.

The management fee during the event period is 0.4%, and the management fee during the non-event period is 0.5%.

Subscription fees and redemption fees for some products have also been reduced

  The operation of a bank wealth management product from start to finish will involve a number of costs, mainly including: subscription/subscription fee, redemption fee, management fee, sales service fee and custody fee.

At present, the phased discounts introduced by bank wealth management mainly focus on sales fees and fixed management fees.

Unlike public funds, the subscription/subscription fee and redemption fee for most bank wealth management products are 0.

Therefore, many people care about subscription fees and redemption fees when buying funds, and they don't consider fees at all when buying bank wealth management products.

  In fact, many bank wealth management products now charge different proportions of subscription fees according to the size of the amount, and at the same time charge different proportions of redemption fees according to the length of holding time.

In general, the larger the purchase amount, the lower the subscription fee; the longer the holding time, the lower the redemption fee.

  In this wave of "discounted" promotions, the subscription and redemption fees for some bank wealth management products have also been reduced.

For example, Everbright Wealth Management will carry out the redemption fee promotion for Sunshine Gold No. 2 (EB1888) wealth management products from February 14 (inclusive) to December 20 (inclusive).

During the inactive period, if the holding period is less than 360 days, the redemption rate will be 0.50%; during the active period, if the holding period is less than 360 days, the redemption rate will be reduced to 0.25% at a 50% discount.

Some equity products suffered losses

  The recent increase in the volatility of the net worth of bank wealth management products has coincided with the preferential rate promotion of wealth management products.

Since the beginning of the year, with the adjustment of equity and bond markets, the volume and price of bank wealth management products have fallen, and wealth management products with a high proportion of equity allocation have suffered losses.

The net value of many products has declined, and some even fell below the initial net value.

  According to the data provided by China Wealth Management.com, as of February 23, there were 8,346 surviving wealth management products issued by wealth management subsidiaries, of which 536 wealth management products had a net worth of more than 1, accounting for more than 6%. Among them, the correlation with the stock market was relatively high. The rights and interests products are "hardest hit".

According to reports, the overall net value growth rate of all mixed products currently issued by wealth management subsidiaries in the past three months was -0.46%, the volatility rate was 2.40%, and the maximum drawdown rate was 1.53%.

  Statistics show that since the beginning of this year, six of the more than 160 equity/mixed wealth management products with data have had negative returns within six years, and the equity-based net worth has the largest drawdown.

From the perspective of product structure, the main way for wealth management companies to participate in equity allocation is still the FOF (fund of funds) model, but more than 1/5 of the products have fallen below the net value.

  Industry insiders believe that the recent large-scale introduction of discounted product rates by banks' wealth management products not only hopes to attract new customers, but also wants to hedge the negative market sentiments caused by fluctuations in product performance and appease customers by making profits.

analyze

Investors should look at financial products from a long-term perspective

  How should investors rationally view such fluctuations in bank wealth management products?

How to optimize your asset allocation in the future?

  Li Peijia, a senior researcher at the Bank of China's Institute of International Finance, pointed out that in the future, the "broken net" of bank wealth management products may become the norm.

When the transition period of the new asset management regulations ends, all bank wealth management products will be measured by the market value method for public value measurement, and the valuation of bank wealth management products will undergo a new change of "going with the market".

That is to say, the net value of bank wealth management products will reflect a daily change in the underlying underlying asset price, which may be positive or negative.

Overall, the increase in the fluctuation of the net value of the product is a high probability event.

In the context of a weakening market, it is indeed possible that more wealth management products "break the net", and investors need to remain calm about this.

  Li Peijia emphasized that the "breaking net" of the product is only caused by the adjustment of the valuation method, and does not necessarily mean an absolute loss.

Therefore, investors should look at the “breaking net” of a product at a certain time in an objective and rational way, jump out of the “mark to market” mentality, and learn to measure the performance of products from a monthly, quarterly, annual and other mid-term or long-term perspectives.

  "The most important thing is to consider making a good portfolio of assets for different products and improving the comprehensive yield. At present, the financial market is differentiated, the prices of safe-haven assets are rising, and risky assets are falling. Investors should consider the differences in the underlying underlying assets of the products they hold. Combining the development prospects and yields of different products to make a comprehensive match, for example, the price of gold is rising, while the stock market is relatively weak, and gold can be increased moderately, and low-risk financial assets can be allocated." Li Peijia suggested.

  Some wealth management experts also suggested that investors should not use a single bank for bank wealth management investment, and can spread the funds into different products of different banks.

If you cannot accept financial losses, you can choose bank deposit products that guarantee principal and income, such as large-denomination certificates of deposit.

  This group of articles / reporter Cheng Jie co-ordinator / Yu Meiying

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