Bank Wealth Management Fund Allocations Hit Record 2.52 Trillion RMB in Q2 2026, Tech ETF Share Jumps to 32%
As of end-June 2026, bank wealth management products allocated a record 2.52 trillion RMB to public funds, representing 7% of total assets. In the second quarter, they added about 600 billion RMB in bond funds, with median returns of 1.97% for short-term bond funds and 3.53% for medium- to long-term bond funds. Equity allocations shifted via ETFs: tech sector holdings in top ten positions rose to 32% from 12% in Q1, while gold ETFs were reduced. The average annualized return for bank wealth management in the first half of 2026 was 2.05%.
As of end-June 2026, wealth management products allocated a total of 2.52 trillion RMB to public funds, accounting for 7% of total assets, both record highs. In the first half of 2026, the average annualized return of bank wealth management was 2.05%, with yields continuing to face pressure.
In the second quarter alone, bank wealth management added about 600 billion RMB in bond funds. Among these, market-value method medium- to long-term bond funds saw the largest increase, followed by over-the-counter index bond funds, market-value method short-term bond funds, money market funds, and secondary bond funds. The median returns of short-term bond funds and market-value method medium- to long-term bond funds heavily held by wealth management in the second quarter were 1.97% and 3.53%, respectively, with median maximum drawdowns of 7 basis points and 21 basis points.
On the equity allocation front, wealth management funds underwent a structural shift through stock ETFs. In the second quarter, wealth management significantly increased holdings in tech sector ETFs, with the share of tech stocks in the top ten holdings jumping to 32% from 12% in the first quarter, mainly focusing on semiconductors, telecommunications, and consumer electronics. During the same period, wealth management reduced holdings in cyclical, financial, real estate, and broad-based ETFs, and significantly cut gold ETFs, with the reduction larger than in the first quarter.
By institution, CMB Wealth Management held the largest public fund allocation, with its top ten holdings in its semi-annual report totaling 98.63 billion RMB. Minsheng Wealth Management held 71.26 billion RMB in funds, and Industrial Bank Wealth Management held 68.78 billion RMB.
Deposit migration provided the core increment for wealth management scale growth. As of end-June 2026, the outstanding scale of wealth management products stood at 33.66 trillion RMB. After the new redemption fee rules took effect, the holding period for exemption from redemption fees was reduced to one month, lowering allocation costs. In a low-interest-rate environment, the coupon income of traditional fixed-income assets such as deposits, interbank certificates of deposit, and short-term bonds continued to compress, while net value management faced strict regulation. As a result, wealth management's demand for outsourcing to public funds further increased, including relying on public funds for duration management, tactical trading, and indirect equity allocation.