Recently, the lower limit of performance comparison benchmarks for some wealth management products has fallen below 2%, attracting widespread attention in the market. This includes both the downward adjustment of performance comparison benchmarks for existing products and the direct setting of performance comparison benchmarks below 2% for newly issued products.

For example, Bank of Guiyang announced that, based on market conditions, it will adjust the performance comparison benchmarks for some products in the "Shuangyin Wealth" series in March 2025. Among them, the adjusted lower limits of the performance comparison benchmarks for three wealth management products, including "Shuangyin Wealth - Weekly Treasure," will reach 1.8%, 1.9%, and 1.9%, all falling below 2%.

"Recently, influenced by fluctuations in the financial market, banking institutions or bank wealth management subsidiaries are flexibly adjusting the performance comparison benchmarks of products to more accurately reflect the level of product returns," said Du Yang, a researcher at the Bank of China Research Institute, in an interview with the Financial Times.

During the interview, the reporter learned that the downward adjustment of performance comparison benchmarks for wealth management products is related to factors such as ample liquidity, declining funding rates, and a decrease in the risk-free return rates, including government bonds.

In fact, since the beginning of this year, several bank wealth management subsidiaries have lowered the performance comparison benchmarks for some wealth management products. In January of this year, Zheshang Wealth Management, Huaxia Wealth Management, Minsheng Wealth Management, and others have frequently issued announcements to lower the performance comparison benchmarks for wealth management products, with some products seeing reductions of over 100 basis points.

In addition to lowering existing products, there has also been a widespread occurrence of performance comparison benchmarks below 2% in newly issued wealth management products. The closed-end fixed-income wealth management product "ICBC Wealth Management · Xindeli Fixed Income Closed-End Wealth Management Product," which began fundraising on February 20, has a performance comparison benchmark lower limit of 1.70%. The two open-end fixed-income wealth management products "Bank of China Wealth Management - Stable Fortune 14-Day Holding Period 07" and "Bank of China Wealth Management - Stable Fortune 7-Day Holding Period 09," which began fundraising on February 21, have performance comparison benchmark lower limits of 1.90% and 1.80%, respectively. Additionally, the performance comparison benchmark lower limits for one open-end fixed-income wealth management product each from Everbright Wealth Management and Xingyin Wealth Management, which started fundraising on the same day, are also below 2%.

Experts generally believe that the setting of performance comparison benchmarks should start from the perspective of investor protection, avoiding excessive focus on product returns while neglecting product risks; adjusting performance comparison benchmarks based on the asset allocation differences of different products can help wealth management subsidiaries optimize asset allocation and improve investment efficiency.

So, does the downward adjustment of performance comparison benchmarks mean a decline in investor returns?

Wealth management experts indicate that although the downward adjustment of performance comparison benchmarks reflects a potential decrease in expected product returns to some extent, it does not necessarily mean that actual returns will decline. If wealth management companies can optimize investment strategies and seize opportunities amid market fluctuations, actual returns may still remain at a high level; however, if the returns on underlying assets continue to decline and wealth management companies cannot respond effectively, then actual returns will decrease.

According to data from Puyi Standard, as of February 19, 2025, the total number of existing products in the bank wealth management market is 40,946, with a total scale of 30.34 trillion yuan It can be seen that standing at the historical node of 30 trillion yuan, facing a low-interest-rate market environment, both wealth management institutions and investors are bound to face the challenges of transformation and the reshaping of concepts.

"The low-interest-rate environment has led to a continuous decline in the yield of underlying assets of wealth management products. Traditional investment strategies and profit models are difficult to sustain. The wealth management industry needs to shift from 'scale expansion' to 'value creation,' achieving high-quality development in the low-interest-rate era through asset-side capability reconstruction and liability-side service upgrades," said Lou Feipeng, a researcher at China Postal Savings Bank, in an interview with the Financial Times.

For investors, it is essential to rationally face the adjustment of performance benchmarks for wealth management products and even the decline in yields, making scientific investment decisions. They should not only focus on yields but also comprehensively consider factors such as product risk and liquidity. At the same time, they should adjust their investment strategies in a timely manner based on their risk tolerance, investment goals, and market changes, reasonably allocate assets, and diversify investment risks to achieve the preservation and appreciation of assets.

Looking ahead to the wealth management market in 2025, industry experts believe that the overall scale is likely to maintain positive growth. However, affected by fluctuations in the bond market, the yield advantage of wealth management products may narrow, and the growth rate of wealth management scale is likely to slow down. From a future perspective, the nominal low-interest-rate environment will continue, and the performance benchmarks for wealth management products may remain at a low level.

Author of this article: Zhao Meng, Source: Financial Times, Original title: "Some Bank Wealth Management Products Fall Below 2%!"

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