The era of low interest rates is approaching, and the yield on fixed income assets continues to narrow. Bank wealth management subsidiaries are turning to the equity market for returns. From offline "new investment" in A-shares and cornerstone investment in Hong Kong stocks, to participating in targeted share issuances and even index based product layouts, the presence of wealth management funds has begun to appear in every corner of equity assets.

However, this path is not smooth: from the perspective of customer base, equity products are still "niche", with a survival scale of only about 0.07%, and financial investors have extremely low tolerance for fluctuations; From the perspective of investment research, traditional fixed income teams lack penetration in pricing equity assets, and new stock quotes often fall into a passive position; From a compliance perspective, there are also obstacles in the channels for outsourcing investment in bank wealth management. The suspension of MOM filing has cut off the shortcut for outsourcing to make up for shortcomings.

At present, although the allocation of equity assets by wealth management funds carries a short-term arbitrage color, its strong attribute as a long-term strategy has been established.

Multi way attack to participate in the 'New Deal'

Since the beginning of this year, bank wealth management subsidiaries have accelerated their equity market layout.

According to data from the Shenzhen Stock Exchange, as of the end of April 2026, the three major wealth management subsidiaries have provided a total of 187 quotations, an increase of 87% compared to early March. From A-share companies like Moore Thread and Shenghe Jingwei, to Hong Kong stocks like Xizhi Technology and CATL, wealth management funds frequently appear on cornerstone investors and offline allocation lists.

Financial subsidiaries are enthusiastic about "innovation", with the core being the urgent pursuit of yield. Against the backdrop of the continued popularity of the stock market, multiple new stocks and private placement projects have achieved significant floating profits. For example, on April 28th, on the first day of listing, Xizhi Technology's opening price rose by 380% compared to the issue price. ICBC Wealth Management, as a cornerstone investor, subscribed for $2.5 million worth of shares at HKD 183.2 per share, with a floating profit of over HKD 70 million on the first day.

Sun Junqi, Director of the Research Department of Shenzhen Jinwen Institute, stated in an interview with Shanghai Securities News that the reason for the large-scale participation of wealth management subsidiaries in the "innovation" can be summarized as the "three forces": the continuous downward pressure of underlying asset returns, the acceleration of policy dividends, and the market activation of short-term profit effects.

The specific forms of participation of wealth management subsidiaries are becoming increasingly diverse. Currently, in terms of A-shares, the business scope has extended from offline allocation to targeted issuance; In terms of Hong Kong stocks, cornerstone investment is the main mode.

Sun Junqi analyzed that the offline placement of A-shares focuses on institutional dividend arbitrage, and currently has the dual advantages of the highest certainty of returns and the lowest operational threshold, which perfectly fits the capability boundaries of current wealth management subsidiaries; Although targeted issuance can provide a discount safety cushion, it also poses a serious challenge to the institution's ability to manage duration mismatches and liquidity management; The cornerstone investment in Hong Kong stocks has the greatest return elasticity, but it also faces the dual test of high-yield differentiation and high investment research barriers. For most of the current wealth management subsidiaries, it has exceeded their existing capacity boundaries.

The challenge of rights and interests is arduous and the road ahead is long

Bank wealth management will be officially upgraded to Class A investors in March 2025, enjoying the same distribution treatment as public funds, and can directly participate in offline issuance. Although the policy has been approved, the layout of equity assets by bank wealth management subsidiaries is still constrained by the deep mismatch of fund attributes, profit models, and investment research capabilities. According to Puyi Standard data, as of May 7th, the proportion of existing equity wealth management products in the entire market was only about 0.07%.

Tian Lihui, a finance professor at Nankai University, told reporters that the core competitiveness of wealth management subsidiaries lies in their strong debt side advantages, huge retail customer base, and parent bank channels, which provide them with sustained and abundant low-cost funding sources.

However, its shortcomings are also prominent. Tian Lihui stated that the investment and research capabilities of wealth management subsidiaries are relatively weak, and traditional fixed income teams lack penetration into industry cycles, company fundamentals, and market sentiment, leading to the dilemma of ineffective pricing or passive price matching for new stocks. Meanwhile, the decision-making chain with hierarchical redundancy appears inefficient during the rapidly changing bidding window period.

An insider from a subsidiary of a joint-stock bank's wealth management company told reporters that the customer base of bank wealth management mainly comes from deposit customers, whose core needs are "capital preservation" and "just redemption", and their tolerance for fluctuations in net asset value is extremely low. Previously, wealth management funds have also attempted to lay out equity assets through private equity funds through outsourcing, but some securities firms' asset management only serves as a channel in MOM business, and actual investment decisions are still dominated by wealth management subsidiaries or insurance funds.

The person told reporters that currently, wealth management subsidiaries still generally adopt a product structure of "stable bottom position+excess elasticity". The mainstream model is the "fixed income+" strategy, which means that more than 90% of assets are allocated to fixed income assets such as high-grade bonds and certificates of deposit as a safety cushion, and the remaining positions are used to participate in "new investment", private placements, or equity ETFs.

Under the regulatory framework of high-quality development, various innovative product forms of bank wealth management subsidiaries have entered the stage of practical verification. At present, fixed income assets have become a red ocean, and bank wealth management will wander in the blue ocean of equity assets in the future. It can be foreseen that bank wealth management subsidiaries with risk tolerance and product innovation capabilities may gain broader business expansion space.

Source: Shanghai Securities Journal