CICC Holds 2018 Wealth Forum and Releases China Wealth Management Products White Paper

China International Capital Corporation Limited’s (CICC) Wealth Management Department held its 2018 Wealth Forum today in Beijing. The Forum also witnessed the release of White Paper on China Wealth Management Products 2007-2017 (“White Paper”). The theme of the Forum is “Ten Years On: New Era, New Orientation”, as CICC started its wealth management services ten years ago. BI Mingjian, CEO of CICC, delivered the opening speech to over 1,000 guests. Renowned investment and corporate managers, investment strategists and asset allocation experts, and prestigious experts including economist XU Xiaonian and WANG Xiaolu, Deputy Director of National Economic Research Institute, exchanged insights on topics such as macroeconomic trends, portfolio allocation, investment strategies in primary and secondary markets, as well as the development of cutting-edge technology, art and tourist sectors.

Condensing CICC’s research achievements over the past decade, the White Paper is CICC’s first work to provide a systematic review of China’s wealth management market. It describes in detail the development, regulatory evolution and overall performance of six types of wealth management products: fixed income, mutual fund, private offering, private equity, overseas products and structured products, and provides an outlook on the future development of the domestic market.

According to the White Paper, the rapid expansion of total private wealth in China has been bolstered by the country’s high-speed economic growth in the past ten years. As of the end of 2016, private wealth totaled RMB165 trillion in China, making the country the second largest private wealth market next to the US. Driven by the momentum, China’s financial product market also experienced fast development. As of the end of Q3 2017, the domestic market totaled estimated RMB72 trillion in value, or estimated 40% of China’s total private wealth. Meanwhile, a notably higher proportion of investment has flowed to financial assets. The share of savings and investment properties in personal investable assets has lowered from 83% in 2006 to 60%, while a substantially increased proportion of personal investment has flowed to financial assets such as bank wealth management, capital market, private equity and overseas products.

Data in the White Paper shows that there is an excellent match between the risk and return profiles of the products and investor risk appetites, and they have provided long-term, steady incomes for the latter. In terms of annualized return, among the six types of products, public offering, private offering and hedge fund have achieved over 10%, far higher than the SSE Composite Index (2.1%) over the same period; bank wealth management, assembled trust and bond products have achieved 5%-7% respectively, better than the ChinaBond Aggregate Index Total Return Index (Total Value) performance; the money fund products have achieved 3.3%, outperforming inflation (2.8%) while ensuring daily liquidity.

According to White Paper’s forecast, China’s wealth product market will continue to improve and open up along with economic transformation and maturing regulation; diversified investment through professional institutions will be embraced by more investors. Also, the combination of technology and finance will further drive reforms in traditional finance and wealth management services.

Dr. QIU Jin, CIO of the Wealth Service Center and Managing Director of CICC, said: “In a maturing financial market, an investor’s return on long-term investment mainly depends on the makeup of the portfolio, and the key is to build a portfolio that matches their risk tolerance. However, most individual investors still need professional wealth management institutions to help them build appropriate portfolios and select products or fund managers with long-term outstanding performances. ”

CICC pioneered to explore China’s high-end wealth management sector in 2007. Since 2010, it has established an asset allocation research system and product research team, and accumulated abundant experience in portfolio and product research. The Wealth Management Department of CICC provides investors with one-stop, customized investment management solutions across markets, assets and borders, based on its research achievements and platform as well as rich service experience.