The landscape of financial investments is witnessing a notable transformation, particularly in the realm of wealth management companies as they actively seek to capitalize on the recovering capital marketsThroughout 2024, there has been a burgeoning interest in equity investment products, especially mixed and equity-heavy optionsThis enthusiasm is underscored by the launch of several high-profile investment products, one consisting of an impressive initial fundraising target reaching up to 1.354 billion RMB.

As appetite for risk among investors begins to rise again, it's anticipated that the demand for equity investment products will experience substantial growthHowever, this shift will presumably manifest a pronounced disparity among various investment vehiclesProducts that effectively balance risk and return are expected to appeal more to investorsIn this evolving context, wealth management companies that specialize in equity investment stand poised to leverage their expertise significantly.

Since the beginning of the year, these companies have ramped up their offerings in equity products, with several achieving remarkable performance metrics

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One standout is the "Zhaoyin Wealth Management Ruihe Stable An Ying Youxuan Closure No6," which has been successful in securing a record-breaking 1.354 billion RMB in fundsThis product represents the largest initial fundraising by Zhaoyin in over a year for those rated R3 and above.

Moreover, Minsheng Wealth Management has launched its risk-rated R4 mixed-equity product, "Yinzhu Mixed Lingdong A-share Opportunity," while Xiyin Wealth Management introduced "Fuli Xinghe Fuda Dividend," rated R3. Data from Puying Standard reveals that over 50 equity investment products have been launched since the latter half of 2023.

As of February 25, 2024, the ongoing scale of equity products offered by various wealth management companies reached approximately 37.152 billion RMB, with publicly listed companies controlling around 200 billion RMB, amounting to an impressive 53.93% market share

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Performance analytics depict that select equity investment products have delivered robust returnsFor example, since December 2023, the "Zhaozhuo Value Select Equity Investment Plan" has seen its net asset value soar, with a remarkable increase of 13.5% as of February 21, outperforming its benchmark by 17.7%.

Statistics from Beta Data demonstrate that by the end of January 2024, there were 14,603 open investment products, with a median benchmark return of 3.35%. Within the equity class, the products stood out even more, boasting a median benchmark return of 5.92%. A noteworthy trend also observed is the rising popularity of products that eliminate management fees, particularly those that charge based on performance milestones, thus aligning the interests of the investment managers and their clients more closely.

As noted by Lv Shuang, a senior research analyst in the banking sector at Xinyi Research Company, some wealth management firms have eliminated fixed management fees, opting to only charge a floating fee when their performance benchmarks are met

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Such strategies are expected to reinforce the alignment of interests between management firms and their investors.

A representative from Zhaoyin Wealth Management highlighted that the equity market—following nearly two years of consolidation—has reached a juncture where investment potential is more favorableInvestors’ trust has become increasingly valuable at this stage, and the innovative fee structures are designed not only as a means of returning value to clients but also to demonstrate the firm’s commitment to shared success with investors, fostering a calm and confident investment environment.

From an investment perspective, products with mixed equity components are increasingly favored, particularly after a challenging start to the year for the stock market, leading wealth management firms to explore strategies involving fixed income and mixed investment opportunities

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Yu Fenghui, an economist and expert in new financial trends, pointed out that the increase in the launch of hybrid investment products reflects a broader strategy—balancing risk with stable returns by merging fixed-income assets alongside equity opportunities.

Currently, investors exhibit a preference for equity investment types such as stock funds and mixed funds, which typically promise strong returns while maintaining sound risk control featuresLu Shuang reiterated that the banking sector’s role as a liquidity reservoir has manifested through an increase in cash management and other fixed-income products targeted towards conservative investorsFurthermore, with previous experiences of ‘breaking net asset values,’ investors harbor a clear expectation to stabilize net asset fluctuations while enhancing yields.

For discerning investors, the allure of products that combine the benefits of fixed income with equities—especially those that are historically proven to outperform—stands out, especially those that feature reduced volatility and favorable fee structures

Nevertheless, it’s vital to note that equity investment products do not constitute the mainstream offering within the investment sectorTheir limited availability is due in part to most banks and wealth management firms' preferences for fixed-income products; thus, products from institutions with a robust pedigree in equity investment are more likely to garner investor confidence.

In light of these trends, companies are actively restructuring their business models to augment their capacity in balancing risk and returnsZhaoyin representatives shared that since early 2022, they have evolved their investment strategies to embrace diversified approaches across various asset classes—including dividend yields alongside other fundamentally sound strategiesThey continue to refine their offerings by incorporating low-correlation strategies from sources such as global market values, periodic trading, convertible bonds, and precious metals to enhance the expected returns for investors.

Industry insiders believe that the upturn in dividends and quality-focused investments, strategically diversified to mitigate risks, will see renewed investor interest as market sentiment rebuilds

Xiyin Wealth Management also revealed plans to launch products that bolster solid returns while ensuring liquidity amid varying market conditionsTheir strategy aims to blend reliable lower-volatility assets such as preferred stocks with higher-yield options like dividend ETFs, aiming at creating a balanced investment portfolio for discerning investors.

As the wealth management firms trend toward harnessing technology, analysts like Wei Lingyan emphasize a continual need for innovation across diverse equity products to satisfy an array of investor demandsProducts such as classic stock funds, thematic investment funds, and index-related vehicles are now accompanied by greater attention to delivering personalized investment services tailored to unique asset allocation needs.

In conclusion, as investor preferences lean towards stable and adaptable investment solutions, wealth management firms must enhance their technological capabilities to provide better research-driven insights and develop competitively superior investment products