A-shares Continue to Adjust; Are Bank Wealth Management Funds Also Selling Off? Industry: Controlling Drawdowns and Passively Responding; Maintaining a Defensive Stance in the Short Term

Recently, global risk aversion has increased, and the A-share market has become more volatile. Under continuous adjustments, the series of actions by bank wealth management funds are also seen by the market as one of the sources of selling pressure.

So, what is the actual situation? A reporter from Cailian Press interviewed several city commercial banks, joint-stock banks, and state-owned large banks’ wealth management subsidiaries and learned that overall liabilities are stable, but there have been movements on the asset side. Regarding the future, many institutions clearly stated they are “waiting for the right side,” and will continue to maintain a defensive stance in the short term.

Limited growth in fixed income +, redemption pressure exists but is manageable

Several interviewed wealth management institutions told Cailian Press that current redemption pressure is generally manageable. A wealth management staff member from a city commercial bank revealed that most products with high volatility are medium- to long-term locked-in products. Bonds are performing well with little fluctuation, and redemptions of cash management and short-term fixed income products are also controllable. Another city commercial bank wealth management staff also said, “Currently, redemption situations are still manageable.”

On the other hand, although there has been an expansion in the allocation of wealth management funds into equity-linked products and “fixed income +” products this year, the proportion is not as high as imagined. A wealth management subsidiary of a large state-owned bank is relatively calm, saying, “We are quite cautious about equity-linked products, and overall redemption situations are stable.” A staff member from a joint-stock bank also emphasized, “‘Fixed income +’ products do not constitute a large part of the total products, and redemption pressure is ‘okay.’”

A person in charge of a joint-stock bank’s wealth management subsidiary told Cailian Press, “Overall, wealth management remains mainly low-volatility. This year’s growth mainly comes from ‘fixed income +,’ but the central risk assets within ‘fixed income +’ are significantly lower than those in funds, and the risk assets are more diverse and dispersed. The overall drawdown and volatility are also less than those of funds, so redemption pressure is currently not high.” He further pointed out that the sharp decline in overall risk assets is a good thing for wealth management as a whole, “Clients’ risk appetite is shifting more towards defense and low volatility.”

Asset side: continue to reduce positions and wait for the right-side signals

Although liabilities are generally stable, there have been actions on the asset side.

The aforementioned city commercial bank wealth management staff revealed that recent redemptions of “fixed income +” funds are not part of active strategic repositioning but are a sensitive response to market volatility. In other words, wealth management institutions are not bearish on the market and reducing positions in advance; rather, they are passively responding under net value decline pressure to control product drawdowns and avoid channel complaints.

Huachuang Fixed Income team pointed out that, following recent stock market adjustments, last week “fixed income +” funds experienced continuous net redemptions, with redemption intensity on Friday reaching the largest since the second half of 2025. Tanfeng Fixed Income team also noted that over half of “fixed income +” funds recorded their largest net value decline this year last week, and the redemption fulfillment rate (compared to the performance benchmark) for “fixed income +” and hybrid wealth management products also fell to a low this year.

From a product structure perspective, Tanfeng Fixed Income team analyzed that, considering that most “fixed income +” wealth management products are long-term closed-end products, the redemption pressure from liabilities is relatively controllable. However, under the pressure to maintain net value, redemptions of “fixed income +” funds are also relatively high.

For future deployment, all interviewed institutions remain cautious. “We will definitely continue to reduce positions and wait for the right-side signals,” said the aforementioned staff from a joint-stock bank, emphasizing that waiting for clear right-side signals before re-entering is a more prudent choice. This means that before the market truly stabilizes, wealth management funds are likely to continue maintaining a defensive stance in the short term, safeguarding the fixed income fundamentals and cautiously responding to equity-linked volatility.