Yield Falls Below 2% for the First Time, 29 Bank Wealth Management Products Face Fundraising Difficulties at Year Start

21st Century Business Herald Reporter Ye Maishui

Financial products worth 33 trillion yuan are experiencing growing pains, frequently failing during issuance.

Since the beginning of the year, many leading financial institutions have announced the failure to establish new products, mainly due to not reaching fundraising targets. Some products have a minimum fundraising threshold of only 5 million yuan. According to Tonghuashun statistics, at least 29 products are involved. Analysts believe this is an inevitable result of intensified homogeneous competition among fixed-income products in a low-interest-rate environment. Last year, the average return of bank wealth management products first fell below 2%, reaching only 1.98%, indicating a decline in attractiveness.

29 Products Fail to Launch

On March 19, Huaxia Wealth Management announced that Huaxia Wealth Management HeXiang Fixed Income Wealth Management Product No. 37 failed to establish because the total amount raised did not meet the minimum issuance scale specified in the product prospectus. Funds collected through Huaxia Wealth Management will be returned to the clients’ wealth management accounts within two working days after the original establishment date (March 19, 2026). For purchases through other distributors, the specific account, date, and time of fund return will be subject to the distributor’s payment regulations.

This is not the first Huaxia Wealth Management product to fail due to insufficient fundraising. According to Tonghuashun, in March alone, Huaxia Wealth Management issued six notices of non-establishment, including the aforementioned Huaxia Wealth Management HeXiang Fixed Income Product No. 37, as well as “Fixed Income Debt-Backed Closed-End Wealth Management Product No. 1317,” “Pure Debt Fixed Income Closed-End Wealth Management Product No. 354,” “Yue Anxin Fixed Income Pure Debt Closed-End Wealth Management Product No. 83,” “Fixed Income Debt-Backed Closed-End Wealth Management Product No. 1381,” and “Fixed Income Debt-Backed Closed-End Wealth Management Product No. 1002.”

From the product prospectuses, all six are closed-end net value fixed income products, mainly with low to medium risk levels, generally stable. The product durations vary widely, from as short as 97 days to nearly three years, covering short-, medium-, and long-term investment needs.

In terms of investment allocation, there is some differentiation. “HeXiang Fixed Income Wealth Management Product No. 37” combines money market instruments, various debt assets, and a small amount of equity assets. The other five focus solely on pure fixed income, mainly money market tools, standardized debt assets, and other fixed income financial instruments compliant with regulations. Many products have a minimum issuance threshold of 50 million yuan, while the low-risk “Huaxia Wealth Management Fixed Income Debt-Backed Closed-End Wealth Management Product No. 1381” has a lower limit of 5 million yuan.

According to Tonghuashun, since the beginning of the year, 29 bank wealth management products have failed due to insufficient fundraising, involving companies such as Puhui Wealth Management, Guangdong Nanhai Rural Commercial Bank, China Merchants Bank Wealth Management, Bohai Bank Wealth Management, Guangfa Bank Wealth Management, Everbright Wealth Management, Huihua Wealth Management, and others.

Recently, Puhui Wealth Management stated that it issued Puhui Wealth Management Qian An Yue Company-specific Wealth Management Product No. 2603 on March 4, 2026, with the subscription period ending on March 10, 2026. The product failed to establish because the total subscription amount did not meet the minimum issuance scale specified in the prospectus. Puhui Wealth Management will refund all investor funds within two working days after the subscription period ends.

Even industry leaders are not immune. China Merchants Bank Wealth Management recently faced setbacks. In mid-February, it announced that its “Zhaorui Jiayue (Technology Growth) Daily 370-Day Holding Period No. 1 Fixed Income Enhancement Wealth Management Plan” did not meet the final fundraising scale, as the actual amount raised fell short of the minimum. According to relevant agreements, the plan was deemed not to have been established.

Analyzing the reasons for these failed products, market consensus points to several factors: first, supply-side issues, with product types being highly concentrated and homogeneous, mainly closed-end fixed income products. In a declining interest rate environment, their expected returns may not be attractive enough to investors; second, on the demand side, investors generally prefer liquidity and are more cautious about risk, leading to limited interest in long-lockup closed-end products. Additionally, as wealth management firms become more sophisticated in operations and management, they tend to proactively terminate issuance if initial fundraising expectations are too low, reflecting more rational and cautious market decision-making.

Wu Zewei, a special researcher at Sichuan Commercial Bank, stated that this is an inevitable result of intensified homogeneous competition among fixed-income products in a low-interest-rate environment. As market yields continue to decline, traditional closed-end fixed income products become less attractive. If wealth management firms continue to follow past scale-driven issuance rhythms, they will face difficulties in fundraising. This also indicates a certain mismatch between the product side and the capital side of the wealth management market.

Banks Batch-Reduce Performance Benchmarks

Alongside the fundraising failures, banks are also collectively lowering their performance benchmarks. According to Tonghuashun, since the beginning of the year, 2,023 bank wealth management products have adjusted their performance benchmarks.

For example, on March 11, Shenzhen Rural Commercial Bank announced an adjustment to the benchmark of its “Xin Tong Wealth Management – Zhen Yuan Jin Nian Nian Ying Wealth Management Product No. 39.” The bank stated that, based on current market interest rate changes and fund operations, it plans to adjust the benchmark from March 27, 2026. Before the adjustment, the benchmark was 2.30%-3.05%; after, it will be 2.15%-3.00%, a change of 5 to 15 basis points.

Minsheng Wealth Management’s “Gui Zhu Fixed Income Enhancement Two-Year Open No. 2” product saw its benchmark sharply lowered from 4%-6% to 2.6%-3.1%, a maximum reduction of nearly 50%.

Starting February 3, 2026, the benchmark for the Agricultural Bank of China Wealth Management’s “Agricultural Bank of China Anxin Lingdong 7-Day RMB Wealth Management Product (Corporate Exclusive)” was adjusted from 2.20%-3.20% (annualized) to 1.70%-2.20%, with the upper limit down by 100 basis points.

Additionally, the Agricultural Bank of China Wealth Management announced adjustments to the benchmark of its “Agricultural Bank of China Progress • Two-Year Open” Value Selection Phase 1 RMB Wealth Management Product, effective from March 11, 2026. The benchmark was lowered from “3.40%—4.55% (annualized)” to “2.20%—3.00% (annualized),” with the upper limit down 155 basis points and the lower limit down 120 basis points.

Besides significant reductions in benchmarks, many wealth management firms are also changing some products’ benchmarks to index-based or market rate-based measures.

Xingyin Wealth Management announced that it would adjust the benchmark of its “Wen Tian Li Daily Profit Increase No. 6 Daily Fixed Income Product” from an annualized 2%-2.7% to the “People’s Bank of China 7-Day Notice Deposit Rate,” effective February 9.

Zhaosheng Wealth Management also announced that it would adjust the benchmark of its “Zhaorui Daily Open 30-Day Rolling No. 1” from 2%-3.7% to “30% of the People’s Bank of China’s current deposit rate + 70% of the ChinaBond 0-3 Month Treasury Bond Index Yield,” effective March 10.

The China Banking Wealth Management Market Annual Report (2025) published by the Bank Wealth Management Registration and Custody Center shows that by the end of 2025, the bank wealth management market’s outstanding scale reached 33.29 trillion yuan, an 11.15% increase from the beginning of the year, reaching a new level. However, yields were disappointing, with the average annualized return last year at only 1.98%, down 67 basis points from 2024’s 2.65%, marking the first time falling below 2%.

Fang Fangfang, operations manager at PaiPai.com Wealth Public Fund Products, believes that as yields gradually decline, the failure of bank wealth management fundraising may become the norm. On one hand, the macro environment of “low interest rates” and “asset scarcity” is unlikely to change in the short term, making it challenging to create attractive and competitive products. On the other hand, wealth management firms are becoming more mature in their product strategies and operations, no longer blindly pursuing issuance volume, and will promptly adjust products that do not meet preset standards. Meanwhile, industry differentiation and consolidation will become more pronounced, with market resources increasingly concentrated in products and managers with strong investment capabilities and stable performance. Products lacking clear positioning and features will face greater exit pressures. This is essentially a stage where market mechanisms play a role in promoting higher industry efficiency.

Looking ahead, the way for wealth management products to break through lies in truly practicing a “customer-centric” philosophy, relying on differentiated strategies and solid investment management capabilities to build core competitiveness. Specifically, it involves: 1) enriching and optimizing product lines to design diversified products that meet different risk preferences, return goals, and liquidity needs; 2) continuously strengthening and improving investment research to establish and consolidate customer trust through verifiable, long-term, and sustainable returns; 3) enhancing full-process investor service and support by providing professional, personalized asset allocation solutions to deepen client relationships and build a strong business moat.