Bank wealth management products' average annualized return rate declines for two consecutive months

Our reporter Yang Jie

Recently, the yields of bank wealth management products have continued to come under pressure. On April 17, data obtained from Puyi Standard showed that the average annualized return of wealth management products in March this year was 1.01%, down from 2.11% in February and 3.71% in January.

In addition, the China Banking Wealth Management Market Annual Report (2025) released earlier by the Bank Wealth Management Registration and Custody Center showed that by 2025, the average return of wealth management products had fallen to 1.98%, a 67 basis point decrease from 2.65% in 2024.

“The continued decline in the yields of bank wealth management products is mainly due to the deep adjustment of the interest rate environment and the simultaneous weakening of asset-side income capabilities,” said Xue Hongyan, a special researcher at Su Commercial Bank, to Securities Daily. Since 2025, the bond market yield curve has shifted downward overall, and the coupon income and capital gains space of bonds—main underlying assets of wealth management products—have significantly narrowed, directly lowering the yield center of pure fixed income and cash management products. Meanwhile, the equity market experienced significant volatility in the first quarter of 2026, causing “Fixed Income+” and hybrid products to fail to increase yields through equity positions, resulting in phased net value declines.

Researcher He Yurui from Puyi Standard told Securities Daily that, with multiple rounds of reductions in bank deposit rates, the yields of core fixed income assets such as deposits in wealth management products have also declined, further pulling down the overall yields of bank wealth management products.

Under market volatility, some investors have reported that their “Fixed Income+” wealth management products have turned into “Fixed Income-.”

In response, researcher Qu Ying from Puyi Standard said this also reflects some issues in the development of “Fixed Income+” products. First, there is a certain discrepancy between product positioning and actual performance; some products are sold as “low risk, stable returns,” but in reality, they have a relatively high proportion of equities and convertible bonds, making them prone to significant declines when the market fluctuates. Second, some products previously relied heavily on market-wide upward opportunities for returns, but their ability to generate stable income is insufficient. Third, in investment management, some products gradually increased risk asset allocations during good market conditions but lacked clear risk control mechanisms, leading to larger declines during volatility. Fourth, investors’ understanding of the risk-return characteristics of “Fixed Income+” products is not yet sufficient; they have not fully recognized that the value realization of equity assets depends on a long-term perspective, and they tend to judge products negatively based on short-term net value declines, which can trigger concentrated redemptions and further exacerbate liquidity pressure and net value fluctuations.

According to Xue Hongyan, in the face of the pressure on “Fixed Income+” product yields, wealth management institutions need to abandon the traditional approach of relying solely on extending durations or lowering credit qualifications to seek returns. Instead, they should focus on enhancing asset rotation capabilities and applying absolute return strategies, and moderately expand alternative asset allocations to smooth portfolio volatility. Meanwhile, they should strengthen investor engagement and clearly disclose product risk features to avoid sales misguidance. Investors should actively break the inertia of rigid repayment expectations, rationally accept the volatility inherent in the era of net value, and diversify their asset allocations based on their risk tolerance, avoiding frequent operations due to short-term net value fluctuations. In a low-interest-rate environment, they can reconsider the value of alternative assets such as insurance and deposits to build more resilient wealth portfolios.

“Financial institutions need to pay more attention to ‘controlling volatility and improving the holding experience,’” suggested Qu Ying. On one hand, in asset allocation, wealth management institutions should base their portfolios on stable bonds while reducing reliance on single assets (such as convertible bonds or certain equity types), diversifying risk through multiple strategies; on the other hand, they need to establish clearer risk control mechanisms, such as setting predefined acceptable volatility ranges and drawdown levels, and adjusting positions promptly according to market changes. Additionally, they should enhance active management capabilities by selecting assets more precisely to generate returns, rather than relying solely on market upward trends.

(Edited by: Qian Xiaorui)

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