Why China's 4 Big Banks Have High Returns on Wealth Management Products and Which Products are Worth Investing in?

Introduction

China's 4 big banks, Bank of China (BOC), Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB) and Agricultural Bank of China (ABC), are major players in China's finance sector. According to data from the Bank of China, their wealth management product (WMP) yields are relatively high when compared to other Chinese banks. This article will explore the reasons behind this and highlight some of the most attractive WMPs available to investors.

Reasons for High Returns on WMPs

There are several factors that contribute to the relatively high WMP yields offered by China's 4 big banks:

• Large scale: The banks' large customer base and expansive distribution networks allow for economies of scale, which they can then pass on to customers in the form of higher returns.
• Stable funding sources: The banks have a stable source of funding from their deposit base, which allows them to invest in longer-dated and higher-yielding assets.
• Tight regulatory control: The China Banking and Insurance Regulatory Commission (CBIRC) strictly regulates the WMP market to prevent excessive risk-taking, which promotes stability and attracts customers.

Recommended WMPs

Now that we have an understanding of why China's 4 big banks have higher WMP yields, let's take a look at some of the most promising products for investors:

1. BOC Wealth Management Series: This series offers a range of products to suit different risk appetites, including medium-to-long term bonds and funds that invest in fixed-income securities.
2. ICBC Wealth Management Series: This series includes guaranteed principal products, which offer a fixed return and a guaranteed principal repayment at maturity.
3. CCB Wealth Management Series: The series offers both equity and fixed income products that cover a range of risk appetites, and includes products with a high risk and high return profile.
4. ABC Wealth Management Series: This series offers a range of products, including structured deposits and funds that invest in fixed income securities, equities and other instruments.

Conclusion

Overall, China's 4 big banks offer customers a range of attractive WMPs that provide relatively high yields. Their economies of scale, stable funding sources and regulatory oversight combine to provide stability and attract customers. Investors who are interested in WMPs should consider the products offered by these banks, particularly those recommended above.