330 Million Trillion Wealth Management Products Switch to "Performance Benchmark" Leaving Investors Confused

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Behind the change in performance comparison benchmarks for wealth management products, on one hand, is to guide more products to incorporate index-linked or market rate plus spread models, more accurately reflecting the return characteristics of the underlying asset portfolios, reducing deviations between expected and actual returns. On the other hand, it shifts the competitive logic in the wealth management industry from “benchmark attractiveness” to real investment management strength, actively promoting subsidiaries to focus on asset allocation capabilities and accelerating the industry’s shift toward client-centric wealth management.

Author: Chen Zhi

Cover photo: TuChong Creative

As an investor with 8 years of wealth management experience, Liu Jing said she now finds it really hard to understand the latest performance comparison benchmarks.

By the end of February 2026, a fixed-income wealth management product she purchased with daily opening was maturing. When she was about to reinvest, she found that the performance benchmark of a product she previously favored had been adjusted from 2.40% to “20% × current deposit rate + 80% × ChinaBond 0-3 months Treasury Bond Total Return Index.”

“What is the ChinaBond 0-3 months Treasury Bond Total Return Index? Is its future trend upward or downward?” Liu Jing asked with confusion.

She didn’t know whether this product could still deliver the expected 2.40% annualized return. So she decided to switch to other products. However, she noticed that many wealth management products had quietly changed their benchmarks: from single fixed values (like 2.30%) or ranges (like 2.20%–2.80%) to index-linked models.

Faced with these new benchmarks, she found it difficult to judge the expected returns of these products or how to choose.

At this point, she might not realize that the wealth management industry is undergoing a collective “benchmark reset.”

After the Spring Festival, many bank wealth management subsidiaries have successively adjusted their product benchmarks.

At the end of February, Everbright Wealth Management adjusted the benchmark of Sunshine Jin Tianli Half-Year Profit No. 2 from 1.80% to “CBA00113.CS—ChinaBond New Comprehensive Price (Less than 1 Year) Index Return.”

In early March, Xingyin Wealth Management changed the benchmark of its fixed-income product “Wen Tian Tui Zeng Li 109” from an annualized 1.15%–1.95% to the 7-day notice deposit rate.

A product department head of a bank’s wealth management subsidiary, Chen Jian, told Economic Observer that the “Banking and Insurance Asset Management Product Information Disclosure Measures” (hereinafter referred to as the “Measures”) will officially take effect on September 1, 2026. The Measures stipulate that asset management product managers should maintain consistency in benchmarks and generally should not adjust them.

Chen Jian said, “This means that the previous practice of bank wealth management subsidiaries frequently adjusting benchmarks following market fluctuations is becoming increasingly difficult. To reduce passive adjustments, wealth management products can only abandon single fixed or range-based benchmarks and adopt index-linked or market rate plus spread models.”

Deeper reasons lie in the fact that in a low-interest-rate environment, the actual yields of fixed-income products have difficulty reaching the originally set single fixed or range-based benchmarks, leading to a decline in benchmark achievement rates. To reverse this, bank subsidiaries are “playing tricks” in adjusting benchmarks, effectively lowering them to improve the product’s benchmark achievement rate (i.e., actual returns exceeding the benchmark), thereby conveying a more sustainable investment confidence.

What surprises the industry even more is that this collective “benchmark reset” not only presents new challenges at the sales end but also causes chain reactions in asset allocation.

Benchmark Reset in Progress

Chen Jian explained that benchmarks for wealth management products roughly fall into four types: first, single fixed values; second, ranges; third, market rate plus spread, such as “1-year fixed deposit rate + 0.60%”; and fourth, index-linked, such as linked to the CSI 300 or ChinaBond comprehensive price index.

Previously, bank wealth management subsidiaries preferred setting higher single fixed or range-based benchmarks to boost product marketing effectiveness.

According to the “China Banking Wealth Management Market Annual Report (2025)” published by the China Banking Wealth Management Registration and Custody Center in January 2026, by the end of last year, there were 46,300 existing wealth management products with a total scale of 33.29 trillion yuan.

Chen Jian found that over 80% of existing products used single fixed or range-based benchmarks. Clearly, higher and more definite “values” are easier to attract investors.

However, the “Draft Measures for Asset Management Product Information Disclosure” issued in June 2025 (hereinafter referred to as the “Draft”) affected this marketing strategy. The Draft stipulates that product managers should maintain consistency in benchmarks and generally should not adjust them.

After the Draft was issued, Chen Jian’s bank’s wealth management subsidiary had intense internal discussions. The product department argued that to cope with declining yields of fixed-income assets, they previously could frequently lower the benchmarks—such as twice lowering the benchmark from 2.80% to 2.50% in the first half of last year—but under the new regulation, this approach faces compliance risks. Therefore, they suggested switching these fixed-income products’ benchmarks directly to “ChinaBond—Comprehensive Price (Less than 1 Year) Index.”

To persuade the bank’s wealth management subsidiary to accept this, the product department listed specific advantages of index-linked benchmarks, including better alignment with actual investment strategies and market trends, fewer benchmark adjustments, and compliance with regulatory requirements for benchmark consistency.

However, this suggestion was not adopted. Senior management believed they could wait until the new regulation officially took effect before uniformly adjusting benchmarks.

Chen Jian analyzed that the company still hopes to promote sales and expand assets under management by maintaining higher fixed or range-based benchmarks.

In the second half of 2025, Chen Jian participated in the issuance of over 90% short-term fixed-income products, which still set benchmarks at 2.50% or 2.20%–3%, achieving sales beyond expectations.

But the drawbacks soon became apparent.

After the Spring Festival in 2026, some distribution channels reported that the actual yields at maturity of these short-term fixed-income products were only about 1.80%, failing to meet the benchmarks, with complaint rates increasing by over 20%.

Chen Jian said that the main reason was the continuous decline in yields of fixed-income assets, widening the gap between actual yields and benchmarks.

According to the “China Banking Wealth Management Market Annual Report (2025),” due to falling yields of fixed-income assets, the average yield of wealth management products in 2025 was only 1.98%. In contrast, the benchmarks for fixed-income products issued in 2025 were generally set between 2.20% and 2.50%.

Chen Jian took several remedial measures, such as adding IPO (initial public offering) strategies in “Fixed Income+” products. Despite subscribing to many popular new stocks, the proportion of funds allocated to IPOs was low, and the additional yield was only about 10 basis points, with the maximum actual yield at maturity reaching 1.90%, still below the original benchmark of 2.50%.

Starting in March, Chen Jian’s bank’s wealth management subsidiary decided to “reset” benchmarks—requiring the product department to switch fixed-income benchmarks from fixed values or ranges to market rate plus spread or index-linked models by September this year.

“This move is ostensibly to complete the benchmark reform before the implementation of the ‘Measures’ in September. But more urgently, bank subsidiaries need to reconstruct fixed-income benchmarks to address the huge gap between actual yields and benchmarks,” Chen Jian said.

After adjusting the benchmarks of several cash management products from 1.65% to “7-day notice deposit rate of the central bank” (currently 1.35%), Chen Jian admitted that this adjustment gives the investment team more confidence in exceeding the benchmark in a declining interest rate environment, thus improving the overall benchmark achievement rate of the company’s wealth management products.

Investors “Cannot Understand”

Recently, Liu Jing has been complaining that she increasingly cannot understand the “return expectations” of wealth management products.

In the past, when she saw fixed-income benchmarks at 2.30% or 2.20%–2.80%, she had a clear idea of the future returns; now, when the benchmark switches to the ChinaBond 0-3 months Treasury Bond Total Return Index, she suddenly doesn’t know how much the future return can be.

She called the bank’s customer service for answers, but the staff also couldn’t explain clearly. When asked about the future trend of the ChinaBond 0-3 months Treasury Bond Total Return Index or whether the actual returns of related products could outperform this index, the customer service staff hesitated and couldn’t give a definite answer.

Eventually, Liu Jing decided to switch to another bank, purchasing a fixed-income product still marked with an “annualized 2.40%” benchmark.

Liu Jing believes that the benchmark should be highly recognizable, allowing residents to see at a glance and feel confident to subscribe.

Similarly, Qin Hui, a wealth manager at a large state-owned bank branch in East China, faced similar frustrations.

After several fixed-income products switched to the ChinaBond comprehensive price index or the ChinaBond 0-3 months Treasury Bond Total Return Index, Qin Hui had to explain many questions he himself didn’t fully understand, such as the underlying assets of these bond indices, their future trends, and why these indices were chosen as benchmarks.

Qin Hui said he had provided feedback to the product managers of the bank’s wealth management subsidiaries about investors’ doubts. He also couldn’t give a clear prediction of the future movement of bond indices.

What troubled him more was that after the Spring Festival, over 20 investors transferred their funds to other banks to buy fixed-income products with benchmarks still at 2.30% annualized.

The reason was that these investors believed benchmarks should be “concrete,” preferably with clear values or ranges, so that the future returns of the products are “clear at a glance.”

Qin Hui admitted that it takes time to educate investors and help the market adapt to the new benchmarks. During this process, banks need to further improve the transparency of index-linked benchmarks, so residents can better understand the future trends of the underlying bonds and stocks, forming a more comprehensive and clear view of the products’ potential returns. With increased transparency, residents will be more willing to invest.

In a training session held by the bank’s wealth management subsidiaries in mid-March, Qin Hui suggested that in product promotion materials, the institutions should clearly show the historical performance of the bonds and stock indices linked to the benchmarks under different market conditions, the underlying asset status, and the specific reasons for choosing these indices as benchmarks. This would help bank wealth managers introduce these indices and related products’ future investment returns more accurately and comprehensively.

Market Shock

What the bank’s wealth management subsidiaries did not expect was that this “benchmark reset” would also cause a “shock” in asset allocation strategies.

Zhang Jie, head of the investment department of a joint-stock bank, said that after the benchmark change, his asset allocation operations suddenly faced invisible constraints.

After the Spring Festival, he adjusted a “Fixed Income+” product’s benchmark from 2.50%–3.50% to a new composite index: “ChinaBond New Comprehensive Wealth (1–3 years) Index Return × 90% + PBOC 7-day notice deposit rate × 5% + Nanhua Commodity Index (NH0100.NHF) × 5%.”

After the switch, Zhang Jie found that his ability to allocate a higher proportion to commodities was more restricted. Previously, if he believed commodity prices would rise significantly, he would allocate 10% to commodities for higher returns. Now, with the new benchmark, his risk control department opposed this, fearing that if commodity prices suddenly fell, the product’s net value would drop sharply, making it difficult to meet the benchmark and increasing redemption and complaint risks.

Therefore, the risk control department advised him to strictly follow the “three major index weights” of the new benchmark, limit commodity investments to 5%, and ensure that this part of the investment outperforms the Nanhua Commodity Index, avoiding risky investments.

“After the benchmark change, I feel more restrained in my investments,” Zhang Jie said. But he also understood the risk control considerations: according to the “Measures,” if a product cannot meet the benchmark over the long term, it might be considered non-compliant in disclosure and benchmark setting, which could negatively impact the bank’s wealth management business.

Similar investment dilemmas also faced Dai Feng.

As a manager of equity investments in a joint-stock bank’s wealth management subsidiary, he managed two equity products whose benchmarks changed from an annualized return of 5%–8% to the “CSI Dividend Index.”

However, the senior management also set another performance requirement: during market downturns, the investment return of these equity products should be above 0%; during market upswings, they should outperform the CSI Dividend Index.

Dai Feng said that during market declines, his equity allocation strategies would face greater tests, because his goal is not to outperform the index’s decline but to avoid losses.

“I need to focus more on safety. When the equity prices exceed my reasonable valuation, I will decisively take profits,” he said, which might cause him to miss out on higher returns.

He also suggested adding a new benchmark for equity products—such as annualized absolute return or maximum drawdown—to better demonstrate resilience and high return potential, as well as the actual investment level of the managers.

However, the bank’s senior management did not adopt this suggestion, citing that most residents might not understand these indicators and could perceive the products as lacking clear return expectations.

Zhang Siyuan, a special researcher at Su Commercial Bank, believes that the benchmark reset aims to guide more products toward index-linked or market rate plus spread models, more accurately reflecting the underlying asset returns, reducing deviations between expected and actual returns, and shifting industry competition from “benchmark attractiveness” to real investment management strength—focusing on asset allocation capabilities and accelerating the industry’s shift toward client-centric wealth management.