330 Million Trillion Wealth Management Products Switch to "Performance Benchmark" Leaving Investors Confused

Reporter Chen Zhí

As an investor with 8 years of financial management experience, Liu Jing says she now truly can’t understand the latest performance benchmark adjustments for financial products.

By the end of February 2026, a fixed income product she purchased with daily accrual matured. When she was about to reinvest, she found that the performance benchmark of a product she favored had been adjusted from 2.40% to “20%×Current Deposit Rate + 80%×CFA0-3 Month Treasury Bond Total Return Index.”

“What is the CBA0-3 Month Treasury Bond Total Return Index? Is its future trend upward or downward?” Liu Jing asked with confusion.

She doesn’t know whether this product can still deliver the expected 2.40% annualized return. So she decided to switch to other products. However, she found that many other products had quietly adjusted their benchmarks: from single fixed values (like 2.30%) or ranges (like 2.20%–2.80%) to “index-linked” benchmarks.

Faced with these new benchmarks, she finds it difficult to judge the expected returns of these products and doesn’t know how to choose.

Perhaps she doesn’t realize that the industry is currently undergoing a collective “re-anchor” of performance benchmarks.

After the Spring Festival, many bank wealth management subsidiaries have successively adjusted their product benchmarks.

By late February, Everbright Wealth Management adjusted the benchmark of its Sunshine Jin Tianli Half-Year Profit No. 2 from 1.80% to “CBA00113.CS—CFA—New Comprehensive Full Price (Less Than 1 Year) Index Return.”

In early March, Xingyin Wealth Management changed the benchmark of its fixed income product, Wintainli Daily Profit Increase No. 109, from an annualized 1.15%–1.95% to the 7-day notice deposit rate.

Chen Jian, head of product at a bank wealth management subsidiary, told Economic Observer that the “Measures for the Management of Asset Management Product Information Disclosure of Banking and Insurance Institutions” (hereafter “Measures”) will officially come into effect on September 1, 2026. The Measures stipulate that asset management product managers should maintain consistency in product benchmarks and generally should not adjust them.

Chen Jian said, “This means that the previous practice of bank wealth management subsidiaries frequently adjusting benchmarks following market fluctuations is becoming increasingly difficult. To reduce passive adjustments, products can no longer use single fixed or range-based benchmarks but must adopt index-linked or market rate plus spread methods.”

Deeper reasons lie in the fact that, under low interest rates, the actual yields of fixed income products have difficulty reaching their originally set single fixed or range-based benchmarks, leading to a decline in benchmark achievement rates. To reverse this, bank subsidiaries are “playing tricks” by adjusting benchmarks to indirectly lower them, thus increasing the product’s benchmark achievement rate (i.e., actual returns exceeding the benchmark), conveying a more sustainable investment confidence.

What surprises the industry even more is that this collective “re-anchoring” not only presents new challenges at the sales end but also causes chain reactions in asset allocation.

Re-anchoring in progress

Chen Jian told reporters that benchmarks roughly fall into four types: first, single fixed values; second, ranges; third, market rate plus spread, such as “1-year fixed deposit rate + 0.60%”; and fourth, index-linked, such as linked to the CSI 300 or the CFA—CFA—New Comprehensive Full Price (Less Than 1 Year) Index.

Previously, bank wealth management subsidiaries preferred setting higher single fixed or range-based benchmarks to enhance product marketing effectiveness.

In January 2026, the China Banking Wealth Management Registration and Custody Center released the “Annual Report on the Chinese Banking Wealth Management Market (2025),” showing that by the end of last year, there were 46,300 existing wealth management products with a total scale of 33.29 trillion yuan.

Chen Jian found that over 80% of existing products used single fixed or range-based benchmarks. Clearly, higher and more definite “values” are easier to attract investors.

However, the “Draft Measures for the Disclosure of Asset Management Product Information of Banking and Insurance Institutions” (hereafter “Draft”) issued in June 2025 impacted this marketing strategy. The Draft stipulates that product managers should maintain consistency in benchmarks and generally should not adjust them.

After the Draft was issued, Chen Jian’s bank’s product department held heated discussions. They argued that to cope with declining yields of fixed income assets, they previously could frequently lower benchmarks—such as twice lowering the benchmark of several fixed income products from 2.80% to 2.50% in the first half of last year—but under the new regulation, this approach faces compliance risks. Therefore, they suggested switching these fixed income benchmarks directly to “CFA—CFA—New Comprehensive Full Price (Less Than 1 Year) Index.”

To persuade the bank’s wealth management subsidiary to accept this, the product team listed the specific advantages of index-linked benchmarks, including better alignment with actual investment strategies and market trends, fewer adjustments needed, and compliance with regulatory requirements for benchmark consistency.

However, this suggestion was not adopted. Senior management believed they could wait until the new regulation officially took effect before uniformly adjusting benchmarks.

Chen Jian analyzed that the company still hopes to promote sales and expand assets under management by maintaining relatively high single fixed or range-based benchmarks.

In the second half of 2025, Chen Jian participated in the creation and issuance of over 90% short-term fixed income products, which still set benchmarks at 2.50% or 2.20%–3%, achieving sales beyond expectations.

But the drawbacks soon became apparent.

After the Spring Festival in 2026, some distribution channels reported that the actual yields at maturity of these short-term fixed income products were only about 1.80%, failing to meet the benchmarks, with complaint rates increasing by over 20%.

Chen Jian said that the main reason was the continuous decline in yields of fixed income assets, widening the gap between actual yields and benchmarks.

According to the “Annual Report on the Chinese Banking Wealth Management Market (2025),” the average yield of wealth management products in 2025 was only 1.98%, affected by declining fixed income yields. In contrast, most fixed income products issued in 2025 set benchmarks between 2.20% and 2.50%.

In response, Chen Jian took several remedial measures, such as adding IPO (initial public offering) strategies to “Fixed Income+” products. Despite securing subscription quotas for several popular new stocks, the low proportion of IPO funds meant only an extra 10 basis points of performance enhancement, with the maximum actual yield at maturity reaching 1.90%, still below the original benchmark of 2.50%.

Starting in March, Chen Jian’s bank’s wealth management subsidiary decided to “re-anchor” the benchmarks of fixed income products—requiring the product department to switch all fixed income benchmarks from single fixed or range-based to market rate plus spread or index-linked by September this year.

“This move is ostensibly to complete the benchmark adjustment before the implementation of the ‘Measures’ in September, but more importantly, the bank’s wealth management subsidiaries need to rebuild the benchmarks for fixed income products to address the huge gap between actual yields and benchmarks,” Chen Jian said.

After adjusting the benchmarks of several cash management products from 1.65% to “7-day notice deposit rate of the People’s Bank of China” (currently 1.35%), Chen Jian admitted that this adjustment gives the investment team more confidence in achieving actual yields exceeding benchmarks in a declining interest rate environment, thus improving the overall benchmark achievement rate of the company’s products.

Investors “don’t understand”

Recently, Liu Jing has been complaining that she increasingly cannot understand the “return expectations” of financial products.

In the past, whenever she saw fixed income products with benchmarks of 2.30% or 2.20%–2.80%, she felt confident about the future returns; now, when the benchmark switches to the “CFA 0–3 Month Treasury Bond Total Return Index,” she suddenly doesn’t know how much the future returns can be.

She called the bank’s customer service for answers, but was surprised that the staff also couldn’t explain clearly. When asked about “the future trend of the CFA 0–3 Month Treasury Bond Total Return Index” or whether the actual returns of the product could beat this index, the customer service staff hesitated and couldn’t give a definite answer.

In the end, Liu Jing decided to switch to another bank, purchasing a fixed income product still marked with a “2.40% annualized” benchmark.

Liu Jing believes that the benchmark of a financial product should be highly recognizable, allowing residents to see at a glance and feel assured to subscribe.

As a wealth manager at a large state-owned bank branch in East China, Qin Hui also faces similar frustrations.

After many fixed income products’ benchmarks changed to the CFA—CFA—New Comprehensive Full Price (Less Than 1 Year) Index or the CFA 0–3 Month Treasury Bond Total Return Index, Qin Hui needs to explain many questions he himself doesn’t fully understand, such as what underlying assets these bond indices hold, whether their future trend is upward or downward, and why these two bond indices are chosen as benchmarks.

Qin Hui said he had provided feedback to the product managers of the bank’s wealth management subsidiaries about investors’ doubts. He also admits he cannot give a clear prediction of the future movement of these bond indices.

What troubles him even more is that after the Spring Festival, more than 20 investors transferred their funds to other banks, subscribing to fixed income products with benchmarks still at 2.30% annualized.

The reason for their withdrawal is that they believe benchmarks should be “concrete,” preferably with clear values or ranges, so that investors can see at a glance the future income expectations of the products.

Qin Hui said that residents need a process of education and market adaptation to accept new benchmarks. During this process, banks should further improve the transparency of index-linked benchmarks, so residents can understand the future trends of the underlying bonds and stocks, forming a more comprehensive and clear view of the potential returns. With better information rights, residents will feel more confident to invest.

In mid-March, during a training session held by the bank’s wealth management subsidiaries, Qin Hui suggested that in product promotion materials, banks should clearly state the historical performance of the bonds and stock indices linked to the benchmarks under different market conditions, as well as the underlying assets of these indices, and the specific reasons for choosing these indices as benchmarks. This would help bank wealth managers introduce these indices and related investment returns more accurately and comprehensively.

Market “shaking”

What the bank’s wealth management subsidiaries didn’t expect was that this “re-anchoring” also caused “shocks” in the asset allocation strategies of the investment departments.

Zhang Jie, head of investment at a joint-stock bank, said that after the benchmark “re-anchoring,” his asset allocation operations suddenly faced invisible constraints.

After the Spring Festival, he adjusted a “Fixed Income+” product’s benchmark from 2.50%–3.50% to “CFA New Comprehensive Wealth (1–3 years) Index Return × 90% + PBOC 7-day notice deposit rate × 5% + Nanhua Commodity Index (NH0100.NHF) × 5%.”

After completing the switch, Zhang Jie found that his allocation of commodities faced stricter performance constraints. Previously, if he believed commodity prices would rise significantly, he would allocate 10% to commodities for higher returns; now, with the new benchmark, this was challenged by risk control, which argued that over-allocating to commodities could cause the product’s net value to decline sharply if prices fell, making it difficult to meet the benchmark and risking redemption and complaints.

Therefore, the risk control team advised him to strictly follow the “three major index weight ratios” of the new benchmark, limit the maximum commodity investment to 5%, and ensure that this part of the investment outperforms the Nanhua Commodity Index, avoiding risky investments.

“After the benchmark re-anchoring, I feel more restrained in my investments,” Zhang Jie said. But he also understands the risk control considerations: according to the “Measures,” if a product cannot meet its benchmark over a long period, it might be considered non-compliant in disclosure or unreasonable in benchmark setting, which could negatively impact the bank’s related business.

Similar investment dilemmas also occurred with Dai Feng.

As a manager of equity investments at a joint-stock bank’s wealth management subsidiary, he manages two equity products whose benchmarks changed from an annual return of 5%–8% to the “CSI Dividend Index.”

However, senior management also set another performance requirement: during market downturns, the investment return of these equity products should be above 0%; during upswings, they should outperform the CSI Dividend Index.

Dai Feng said that during market declines, his equity allocation strategies will face greater tests, because his goal isn’t to minimize losses relative to the index but to avoid losses altogether.

“I need to focus more on safety. When the equity prices exceed my reasonable valuation, I will decisively take profits,” he said. This also means missing out on the chance for excess returns.

He once suggested to the bank’s wealth management subsidiary that they could add a new benchmark for equity products—such as annualized absolute return or maximum drawdown—so that if these indicators stay within a good range over time, they could better demonstrate the product’s resilience and high return potential, as well as the investment manager’s actual skill.

But senior management did not adopt this suggestion, citing that most residents might not understand these indicators and could perceive the products as lacking clear return expectations.

Zhang Siyuan, a special researcher at Sushang Bank, believes that the re-anchoring of benchmarks aims to guide more products toward index-linked or market rate plus spread benchmarks, more accurately reflecting the underlying asset returns, reducing deviations between expected and actual yields, and shifting industry competition from “benchmark attractiveness” to investment management strength, thereby promoting asset allocation capabilities and accelerating the industry’s shift toward client-focused wealth management.