Guotai Haitong: The scale of financial management steadily rebounded in the first half of the year, continuously increasing allocation to public funds.

Guotai Haitong released a research report stating that by the end of June 2026, the outstanding scale of bank wealth management reached 33.7 trillion yuan, an increase of 0.37 trillion yuan from the beginning of the year, representing a year-on-year growth of 9.75%. By the end of the first half of the year, products with medium to low risk accounted for nearly 95%, maintaining their dominant position in the wealth management market, where low risk remains a key characteristic. The scale of wealth management steadily rebounded in the first half of 2026, continuing the trend of multi-asset allocation, with a significant increase in public fund allocation and further consolidation of the market dominance of wealth management companies. The main points from Guotai Haitong are as follows: The scale of wealth management is steadily increasing, with the second quarter seeing the highest growth since 2025. By the end of June 2026, the outstanding scale of bank wealth management reached 33.7 trillion yuan, an increase of 0.37 trillion yuan from the beginning of the year, reflecting a year-on-year growth of 9.75%; among which, the second quarter alone increased by 1.75 trillion yuan, marking the highest increment since 2025. The total number of outstanding products in the market reached 51,200, a growth of 10.58% from the beginning of the year and up 22.49% year-on-year. The impact of deposit migration continues to show, indicating that the scale of wealth management is likely to continue the positive trend observed since the second quarter. The average yield of wealth management products in the first half of the year was 2.05%, a 7 basis points increase compared to the overall recovery in 2025. The duration of closed-end products is being extended, leading to a divergence in risk appetite among individual investors. In terms of product structure, 1) by the end of the first half, closed-end and open-end wealth management products accounted for 22.25% and 77.75%, respectively, with the proportion of open-end products decreasing by 2.12 percentage points from the beginning of the year, and cash management products accounting for 24.26% of open-end products, down 2.22 percentage points; 2) in terms of investment nature, fixed income, mixed, equity, and commodity and financial derivatives products accounted for 96.49%, 3.18%, 0.27%, and 0.06%, respectively, with changes of -60 basis points, +57 basis points, and +3 basis points from the beginning of the year. The trend of multi-asset allocation in the wealth management industry is becoming increasingly clear; 3) regarding risk levels, the proportion of individual investors with a risk preference of level one (conservative) and level five (aggressive) increased by 0.98 percentage points and 0.81 percentage points year-on-year, respectively. By the end of the first half, the proportion of medium to low risk products was close to 95%, still occupying the dominant position in the wealth management market, with low risk remaining a major characteristic. In asset allocation, the proportion of bond assets continues to decline, while the share of public assets is at a new high since 2020. By the end of the first half, the scale of wealth management investment assets was 36.0 trillion yuan, with a leverage ratio of 106.8%, basically unchanged from the end of the first quarter. In the investment portfolio: 1) the proportion of fixed income assets continued to decline, with bonds and interbank certificates of deposit together accounting for a decrease of 1.2 percentage points to 50.2% compared to the end of the first quarter, with interbank certificates of deposit down 1.2 percentage points to 8.6%; 2) the need for cash and deposits remains relatively rigid, with a proportion of 28.1% at the end of the half-year, slightly down 0.6 percentage points from the end of the first quarter, roughly in line with the beginning of the year; 3) there was a continuing increase in public asset allocation, with an addition of 0.57 trillion yuan in public funds in the second quarter, bringing the total to 2.52 trillion yuan, pushing the proportion of public assets up by 1.3 percentage points to 7.0% compared to the end of the first quarter, a level that is fundamentally the highest since 2020. The dominant position of wealth management companies continues to strengthen, with their proportion increasing by 0.4 percentage points year-on-year. By the end of the first half, the products held by 32 wealth management companies totaled 31.2 trillion yuan, a year-on-year increase of 13.5%. There were still 185 banks with active wealth management products, a decrease of six from the beginning of the year, and the progress of the issuance of wealth management subsidiary licenses still needs to be closely monitored. Risk Warning: Volatility in the bond and capital markets may affect the expected growth of both scale and income from wealth management.