Wu Shuang, an all-media reporter from Southern Finance and Economics, reporting from Shanghai.

"recently, there has been a pullback in the financial income of some banks.NodepositnowageringPlease don't be nervous. It's caused by the fluctuation of the bond market. Recently, we can pay more attention to cash management products such as daily financial management, with strong flexibility and stable rate of return. After the May Day holiday, many investors received such reminders from banks.

Obviously, banks and wealth management companies have significantly improved their response to market volatility. Individual investors have not yet felt the obvious fluctuation of the net worth of the product, so the "psychological massage" of the organization is delivered in advance.

Last month, bond market yields went down first and then went up, out of a roller coaster. Before April 23, due to the reduction of government debt supply and the steady state of superimposed capital, the bond bull market continued to develop. Specifically, the expected issuance of ultra-long treasury bonds failed in April, and the issuance of local special bonds slowed again. The net issuance of government bonds for the whole month was negative, to-70.8 billion yuan, and fell sharply by 525.3 billion yuan again from a low base compared with the same period last year.

The turning point came on the evening of April 23. In the evening, the head of the relevant departments of the central bank pointed out in a press release that "the yield on long-term treasury bonds will run within a reasonable range that matches the expectations of long-term economic growth," believing that the current long-term interest-rate-limited bonds are at a low level affected by supply and demand.

Since then, risk aversion in the bond market has fermented rapidly and adjusted substantially in succession. On April 29, the 1-year certificate of deposit, 10-year and 30-year treasury bonds rose to 2. 5% respectively.Nodepositnowagering.17%, 2Nodepositnowagering.35% and 2.58%, higher than the previous lows of 16bp, 12bp and 16bp.

After the hint of the bank financial manager, the reporter looked at the recent income of financial products and found that some of the financial income did withdraw at the end of April, but by a small margin.

The same is true of the overall data. Of the 15000 bank wealth management products, only 107had a negative growth rate of net worth in January, that is, a decline in net worth, according to data from South Finance and Finance. In terms of the number of broken net products, the total number of broken net products is 335, accounting for only 0.02%. In addition, most of the dilapidated products were mixed, accounting for 68.96%, while fixed income and equity accounted for 23.58% and 7.46%, respectively.

The underlying reasons are mainly related to the product structure and asset allocation structure of bank financial management.

Since the beginning of this year, especially in April, the scale of bank financial management has increased significantly. Guoxin Securities Research report shows that the stock of financial products was 28.5 trillion yuan at the end of April, an increase of 2.3 trillion yuan over the previous month. The underlying reasons are: first, bank deposit yields continue to decline, especially after manual repayment is prohibited, some "smart deposits" with high interest rates are stopped, while the benchmark income of wealth management products is about 3%; second, bond yields, especially the short-end decline, are obvious. Wealth management products still have huge capital gains throughout April.

From the perspective of product structure, cash management and fixed income products are the main driving force of scale growth.

Guoxin Securities Macro Collection team report shows that as of May 5, 2024, the total product size of the financial management subsidiary is 24.42 trillion yuan, of which fixed income products are 15.9 trillion yuan, accounting for 65.11%; cash management products are 8 trillion yuan, accounting for 3.276% yuan.

In the basic assets of bank wealth management products, bonds are mainly allocated high-grade credit bonds, supplemented by interest rate debt transactions; rights and interests are mainly through outsourced investment; there are non-standard assets and so on. Due to the relatively high proportion of short-term products in the product structure, banks allocate a large number of short-term, highly liquid and highly qualified bonds such as large certificates of deposit, deposits, two-year bonds and so on.

A state-owned bank said that the price hit is mainly 10-year treasury bonds, 30-year treasury bonds and other longer-term bond varieties, bank financial management has little investment, so the overall impact on its net worth is small, on the contrary, the related ETF funds have a greater impact.

NodepositnowageringHe predicts that in the future, short-end varieties will have less risk of volatility due to stable capital, while long-end interest rate bonds will continue to fluctuate due to supply or macro-economy. In the context of the stability of the overall income of bank financial management, short-term bonds are still the mainstream of allocation.

In addition, a share manager said that the bond market adjustment bank financial management redemption pressure is not great, in part because they have learned from previous experience, there are some preventive operations. For example, to increase the allocation of fund accounts, with the help of the liquidity advantage of fund products to make up for the risk of low-liquidity assets such as direct investment in credit bonds. In other words, if there is redemption pressure, priority can be given to redemption fund accounts. In addition, there are amortized cost valuation techniques, such as trust smoothing, closing price valuation and other methods to iron out earnings fluctuations.

The flip side of avoiding the risk of long-term bonds is that bank wealth management has been blocked in short-term investments since last year.

"this is mainly due to the mismatch between supply and demand in the bond market. At present, high-grade credit bonds are in short supply, leading to a sharp decline in yields across the board and narrowing credit spreads across the board. And financial management mostly prefer short-term assets, short-end interest rates decline more, and the yield curve shows a steep trend. The above-mentioned state-owned people who manage financial sons said.

Specifically, Wind data showed that the overall high-grade credit yield curve steeped downward in April. As of the end of April, the 1-10-year yield of high-grade AAA credit bonds was down 10 to 23 BPS from the end of March. The 1-10-year credit spread narrowed by 2 to 28BPs compared with the end of March.

On the supply side, the net financing of AAA-rated non-bank credit bonds decreased by 29.2 billion yuan to 194.7 billion yuan in April compared with March, while on the demand side, the scale of financial management increased by more than 2 trillion yuan to 28.2 trillion yuan at the end of April compared with the end of March.

The decline in the rate of return on underlying assets is also reflected in the performance benchmark. In the past year, the average performance benchmark of fixed income products of wealth management companies has fallen from 3.08% on May 9 last year to 3.00% now, according to data from Nan Caili Caitong.

"the adjustment of the performance benchmark is mainly due to the decline in asset-side earnings. In fact, the bond bull market has continued since the beginning of the year, and the earnings of various institutions have been very strong." One industry insider said. After the wave of redemptions at the end of 2022, banks began to prefer short-term debt in order to control the withdrawal and match the maturity of products. The increase in the scale of financial management last year was also mainly contributed by short-term products. In addition, after the recent ban on manual replenishment of high-interest deposits, flexible deposits, including unit demand deposits, seven-day notice deposits, and three-year time deposits, the interest-paying costs of three-year time deposits have declined significantly, resulting in an increase in the attractiveness of bond yields with similar maturity.

Huatai Securities's fixed income team analyzed that the prohibition of manual interest payments will logically cause financial management to passively increase the proportion of bond allocation. Coupled with the low supply of certificates of deposit, the interest rate of certificates of deposit will decline significantly. Judging from the one-year AAA interbank certificates of deposit, the yield once fell from 2.24% in early April to 2% at its lowest on April 23. It is expected that from the end of April to the end of June, supply-side logic will affect the bond market, pushing short-end deposit certificates interest rates up but to a limited extent.