New trends in investment and wealth management for Chinese residents: star fund managers are not so good, bonds replace stocks and enter the top three in asset allocation

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Reporter | Feng Saiqi

On September 1, the Shanghai Advanced Institute of Finance of Shanghai Jiao Tong University released a new issue of the “Investigation Report on Chinese Residents’ Investment and Financial Behavior” (hereinafter referred to as the “Report”).

The “Report” pointed out that the allocation preferences of Chinese residents’ wealth management products are relatively concentrated and relatively conservative. The allocation of public funds has been significantly reduced, among which equity allocation has decreased and fixed income has increased, reflecting the characteristics of hedging.

Bank deposits, public funds and bonds are the three assets with the highest proportion of residents’ investment in 2022.

Among them, the allocation ratio of bond assets is 21%, an increase of 6 percentage points compared with last year, replacing stocks as one of the three types of assets with the most allocation by residents in 2022. Equity allocations have increased to 20% from 17% in 2021, with allocations very close to bonds.

Zhang Wenqiao, deputy general manager of SPDB wealth management, mentioned that customers who choose bank wealth management have obvious characteristics. “One is to hope for a certain return on investment, and the other is to be risk averse, so I am more averse to drawdowns and losses, especially losses, because this is a habit that has been cultivated over the past few years.”

Zhang Wenqiao believes that after the establishment of the banking wealth management industry, one of the challenges now is how to control the drawdown to the level of customer satisfaction while considering a certain income.

How to improve customer acquisition? He said that institutions should first improve their asset management capabilities and control drawdowns and fluctuations through technical means, followed by increasing the richness of products and enhancing the added value of products. For example, information disclosure is often particularly important to ordinary people. “Some of our customers especially like to see how much money they can earn every day, which may be more important than how much they earn more. This sense of gain is quite joyful.”

The “Report” shows that the consideration factors for residents to choose funds are more rational, and the enthusiasm for chasing star fund managers, new funds and historically high-yield funds has declined.

The 2022 survey results show that investors’ attention to star fund managers has dropped significantly, with the attention ratio dropping from 24% last year to 14%.

The “Report” believes that it may be the result of the “rollover” incident of star fund managers after the market style switch. Due to market volatility and the fading of star funds, people are more rational when making fund purchase decisions.

However, the phenomenon of irrational investment such as frequent trading and chasing up and down still exists, which has led to investors not earning even a fraction, and the so-called “funds make money, Christian Democrats do not make money” phenomenon, but this year has decreased.

In the survey on whether the fund has changed its investment plan when it loses or gains income, the data shows that when the income exceeds 20%, nearly 34% of the interviewed users choose to increase their holdings, which is a significant drop from the data of more than 50% last year.

In 2022, residents’ expectations for investment income generally declined.

The “Report” found that the proportion of surveyed users with an annualized expected return on investment within 5% increased from 37% last year to 43%. It is worth noting that the number of people with high revenue expectations has decreased significantly. This year, only 13% of users have revenue expectations of more than 20%, which is a significant decrease from 20% last year.

And the size of the population with income expectations exceeding 10% is declining, from 40% last year to 29%, indicating that people’s income expectations are gradually returning to rationality, and on the other hand, it also reflects the pessimism about market expectations.

In terms of residents’ investment and financial management behavior, the “Report” found that compared with the previous year, Chinese residents’ long-term investment awareness has improved.

The proportion of users who are willing to hold within a year has dropped significantly, from 72% last year to 65% this year. At the same time, residents’ tolerance for the loss time of wealth management products has increased. Taking stock funds as an example, the proportion of users who can accept losses for more than one year has increased from 14% last year to 23%.

According to the survey, only 28% of the respondents will increase their long-term investment willingness because of investment advisory services, and half of the respondents do not understand fund investment advisory services. The “Report” believes that my country is still in the initial stage of professional investment advisory, and there is a lot of room for future development.

Zhou Lefeng, president of Xiangcai Securities, also pointed out: “This field is currently considered a blue ocean, and there are not many financial institutions that spend their time on the investment advisory business.” , he believes that in the future, financial institutions can develop new development opportunities by focusing on customer acquisition.