Low-risk product configuration upgrade, individual stocks appear on the heavy holdings list, bank wealth management increases equity investments

Reporter: Li Yunqi

As of March 24, a number of wealth management companies, including Xingyin Wealth Management, Pudongyin Wealth Management, Hangyin Wealth Management, Guangyin Wealth Management, and others, have disclosed their products’ 2025 Q4 reports. China Securities Journal reporters found that wealth management products’ investments in equity-type assets have shown new trends: daily-open and low-risk grade products, which have rarely invested in equity-type assets in the past, have begun investing in stock ETFs; while they also indirectly enter the market through channels such as public funds, the lineup of wealth management products making direct investments in individual stocks is also expanding.

R2-Rated Products Embrace Equity-Type Assets

Looking through wealth management products’ 2025 Q4 reports, reporters found that equity investments are no longer exclusive to products rated R3 and above. In previous wealth management products’ periodic reports, R2-rated products with relatively short holding periods rarely invested in equity-type assets. This is mainly because the clients holding these products have lower risk appetite; when net asset value fluctuates sharply, redemption pressure and customer complaints increase. But in 2025 Q4, many such products also began embracing equity-type assets.

The report for Wealth Management Product No. 1 of Guangyin Wealth “Happiness Low-Volatility Daily-Open Fixed-Income” shows that it is a daily-open, R2-rated product. By the end of 2025, among the top ten assets held after look-through, three were equity-type assets: Huatai-PineBridge CSI 300 ETF, Invesco Great Wall ChiNext 50 ETF, and E-fund CSI 300 ETF. According to the report, during the reporting period, the product follows a prudent investment approach, participating in equity investments through ETFs on the basis of controllable risk, aiming for a portfolio with a relatively good risk-return profile.

Against the backdrop of low interest rates and an “asset shortage” environment, equity investments are becoming one of the increasingly common tools used by wealth management products. Dai Zhifeng, head of the Financial Group at China Zhengtai Securities, expects that in 2026 the scale of wealth management products allocating to equity-type assets will be 930 billion yuan, increasing by more than 60 billion yuan compared with 2025.

The Scope of Direct Individual-Stock Products Expands

Besides entering the market indirectly via other asset management products, many wealth management products are also starting to “do it themselves” when investing in individual stocks. Taking, for example, Hangyin Wealth Management’s Happiness 99 Hongyi (Golden Yield) 30-day holding-period wealth management product: by the end of Q4 2025, Xin Yisheng ranked among the top ten assets invested by this product. Flipping through the product’s periodic reports since its inception, this individual stock is the first time it appears among the top ten assets at period end. Hangyin Wealth Management’s 2025 annual report on its wealth management business shows that at the beginning of 2025 the company directly invested in equity-type assets with a scale of 771 million yuan; by period end it increased to 1.626 billion yuan, an increase of more than 100%.

Xingyin Wealth Management’s “Li Xing Cheng Jin Yun” three-month holding-period No. 1 hybrid product is a three-month holding-period, R2-rated product. By the end of 2025, the product’s top holdings heavily included Tongwei Co., Ltd., Ningde Times, Senqin Kirin, Mengcao Ecology, Di’ao Micro, and Changsha Bank; the proportion of direct equity investment in the product’s total assets reached 26.28%.

“The main obstacle for prior direct individual-stock investment was a shortage of investment research and management strength.” A person from a state-owned large bank wealth management company told reporters that insufficient allocation of research personnel is a real challenge faced by wealth management companies. Since it is difficult to cover and invest in individual stocks, most equity investments are currently completed through channels such as outsourced dedicated accounts and ETFs; indirect investments also help diversify risk and control NAV fluctuations. In the industry, some companies have already begun increasing allocations of investment-research capacity for individual stocks. With future strengthening of investment research capabilities, the channels for wealth management companies to directly invest in individual stocks will become more accessible.

Balancing Returns and Volatility

While increasing equity investments, how to better balance returns and volatility is a problem each wealth management company needs to solve. A person from a wealth management company at a city commercial bank told reporters that, regarding issues such as unstable profitability and low scale retention rates for equity-linked products, the company, under the premise of controlling an appropriate equity position, increased its allocation to hedging instruments and planned exit methods when starting investments. “For example, when we allocate to the CSI 500 ETF, we will do risk hedging and clearly set the yield target to 0%-8%. If the index’s rise exceeds 8%, we only take the 8% yield; if the index falls below the level when we start investing, the losses are also controllable,” he said.

The aforementioned person from the city commercial bank wealth management company said that the company, together with securities firms, developed multi-asset indices, including major asset classes such as stocks, bonds, and commodities. By linking to derivatives and setting up hedging mechanisms, it locks in a yield range, avoids the risk of a single market, and is relatively efficient in terms of manpower. At the same time, how to choose a track is the core challenge currently facing the wealth management industry’s layout in the equity market. The company’s pure track-based equity investment is only for specific product series: each product series can invest in no more than 10 equity funds, to avoid style drift. First, the FOF team screens equity funds into a core pool, and then selects funds matched to each product series. This saves the investment managers’ effort and also avoids the higher costs caused by blind investing and frequent rebalancing.

Kong Xiang, head of the Non-bank Financial Industry Research Institute at Guoxin Securities, said that starting from “fixed-income plus” strategies and expanding to multi-asset strategies is the mainstream and realistic choice for bank wealth management. Going forward, bank wealth management may further increase efforts in the research and application of structured products linked to broad-market indexes or industry indexes, while also exploring strategies with stronger arbitrage attributes, such as market neutral, fundamental quantitative, convertible bond arbitrage, and so on. The returns of such strategies mainly come from correcting pricing discrepancies or changes in relative value among different assets, with a lower correlation to traditional directional investments. They can effectively hedge systemic risk and provide the portfolio with a continuous and stable source of returns.

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Edited by Qin Yi