"Witness the history of ......", this exclamation not only frequently appears in the soaring A-shares, but also occurs in the recent wealth management and bond fund markets.
Recently, many netizens said on social platforms that the income from wealth management and bond base they purchased has fallen rapidly. Someone posted that he thought that the low-risk financial management he bought could reap stable income with peace of mind, but he lost nearly 2,000 yuan in three or four days; Some bond-based investors also posted a direct shout, "The sky is falling!" Witness history...... The debt base can fall like this", which attracted thousands of heated discussions.
Why did the stock market rise sharply, but the wealth management and bond base fell in reverse? As the main underlying asset of wealth management and bond base, why has the bond market adjusted sharply recently, and how will the bond market follow up? In the face of the short-term strong money-making effect of the stock market, should investors redeem their wealth management and debt base and turn to the stock market?
Why did the stock market rise sharply, but the financial management and debt base fell?
Recently, A-shares have risen sharply, refreshing historical records one after another, and frequently appearing in hot searches; Funds from all walks of life have entered the market, and the number of accounts opened by individual investors has doubled. Under the "heat wave" of stock market investment, bank wealth management and bond-based investors feel the "chill".
In the past week, many netizens posted their loss records of investment and financial management and debt base on social platforms. Some netizens said that the R2 (medium and low risk) wealth management products they just bought a week ago thought that the low risk could be relieved and a little stable income, but they lost nearly 2,000 yuan in three or four days.
Some bond-based investors posted lamenting that the sky is falling! Witness the ...... of history The debt base can fall like this. The screenshot of the investor's earnings shows that the total loss of the bond base he invested in exceeded 5,000 yuan on September 27, and the single-day loss wiped out all the profits accumulated in September. The post attracted thousands of netizens to discuss it, and many netizens shared their recent experience of debt-based investment losses in the comment area.
Among them, some netizens also posted questions about why the stock market has risen sharply, but financial management and debt base have lost money?
From the perspective of asset allocation, according to Wind data, bonds account for more than 60% and 96% of the total allocation of wealth management and bond base respectively. Some analysts pointed out that bonds are the most important underlying allocation assets of wealth management and bond base, and the recent rapid adjustment of the bond market has triggered a decline in the income of wealth management and bond base, and if the corresponding product is leveraged, the income fluctuation will be further amplified.
Wind data shows that since September 24, 10-year and 30-year Treasury bond futures have fallen nearly 4.4% and 1.5%, respectively. On September 27, 30-year Treasury bond futures fell more than 3%, setting a record for the largest one-day decline in history; 10-year Treasury futures fell 0.96% in a single day, the biggest drop since early July 2020.
Since September 24, according to wind data, the net value of nearly 5,000 bond-based and more than 1,000 fixed-income wealth management products has declined.
Why is the bond market adjusting so sharply?
As the most important underlying asset of wealth management and bond base, why has the bond market adjusted sharply recently?
September 24 was a watershed year for the stock market and the bond market. On the same day, at the press conference of the Information Office of the State Council, the three major financial regulatory authorities announced a number of policies such as RRR cuts, interest rate cuts and support for the development of the capital market, which enhanced shareholders' confidence in the "policy bottom" of A-shares and opened the "prelude" to the stock market's sharp rise. At the same time, after the monetary policy was strengthened, the expectation of "overweight" of fiscal policy has risen, which has triggered bond investors' concerns about the subsequent increase in the issuance of treasury bonds.
If the government adopts the issuance of additional treasury bonds and other means to raise funds to implement an expansionary fiscal policy, it will lead to an increase in the supply of treasury bonds in the market, and under the condition that the demand remains unchanged, the newly issued treasury bonds will divert some funds, causing bond prices to fall and bond yields to rise. On September 24, the yields of 10-year and 30-year treasury bond active bonds rose by 2.56BP and 4.5BP to 2.06% and 2.1825% respectively.
The fixed income team of Huachuang Securities further pointed out that at the meeting of the Political Bureau of the Central Committee of the Communist Party of China held on September 26, positive statements such as "the real estate market stopped falling and stabilized" and "efforts to boost the capital market" exceeded expectations, the market risk appetite increased significantly, the stock market performed well, and the bond market was under pressure. Since then, A-shares have continued to be hot, and under the seesaw effect of stocks and bonds, bond market investors have increased their worries about wealth management and bond-based redemption, further suppressing the bond market.
What's next for the bond market?
For the follow-up trend of the bond market, the fixed income team of Huachuang Securities believes that in the short term, the first is to pay attention to the follow-up and implementation of fiscal policies such as treasury bonds, the second is to observe whether the stock market can continue to rise after the recovery of investors' risk appetite, and the third is to be vigilant about whether it will trigger a negative cycle of financial management and debt-based redemption.
Referring to 2022, the sharp boost in risk appetite has led to the realization of profit funds in the bond market, and investors' concerns about the "redemption wave" have increased, further forming a negative feedback that wealth management products will fall more and more, and the more they redeem, the more they will fall, resulting in a sharp adjustment in the bond market.
Yang Yewei, an analyst at Guosheng Securities, said that at present, there has not been a large-scale net break (net value less than 1 yuan) in wealth management products, so there has not been obvious redemption pressure. At the same time, about 25% of wealth management assets are cash and deposits, which have a strong ability to cope with redemption, which is significantly different from 2022, so there is no obvious negative feedback risk of redemption at the financial management level. The bond base is mainly dominated by institutional investors, and if the investors themselves have stable debts, the redemption pressure is relatively limited.
The fixed income team of Hua Chuang Securities also said that under the background of the current stability of wealth management net value has been greatly improved and the cost of bank deposits has been reduced, the attractiveness of wealth management products is still there, and the scale may maintain stable growth. However, it is still necessary to pay attention to the inhibitory effect of the increase in risk appetite on the bond market, and the money-making effect of risk appetite and the stock market may become an important factor affecting the trend of the bond market during the year.
In the medium term, bond market trends depend on economic fundamentals. Historically, when GDP growth rises, the bond market tends to perform weakly. Because when the economy is in a recovery or upward channel, market interest rates tend to rise accordingly, which is not conducive to the performance of the bond market, and vice versa.
The fixed income team of Huachuang Securities said that at present, there is still room for financial strength, but considering the gradual shutdown of some northern regions in the fourth quarter, the effect of the steady growth policy on the economy may be more reflected next year, and the impact on the bond market during the year may be relatively limited. If the subsequent incremental fiscal funds are mainly used for the "three guarantees" (ensuring basic people's livelihood, wages, and operation) expenditures and the direction of debt, or it is difficult to change the overall rhythm of slow economic recovery, the bond market may usher in better allocation opportunities after adjustment; However, if more funds are used for project construction, consumption and raising residents' income levels, more attention needs to be paid to the long-term suppression of the bond market by the improvement of fundamentals.
Do investors want to redeem wealth management and debt bases, and turn around to the stock market?
In the face of the recent rapid decline in the bond market, especially in the context of the obvious short-term money-making effect of the stock market, some investors have chosen or considered redeeming their wealth management or bond base and switching to the stock market.
However, some netizens believe that bonds and stocks have different natures, and it is not easy to make money in the stock market, but the bond market has always been "bull long bear short". Some netizens bluntly said that the decline in the net value of wealth management and bond base is mainly due to the short-term adjustment brought about by the decline in bond prices, because bonds still have fixed interest income, even if they suffer short-term losses, there is a high probability that they can return to their principal in a year and a half. However, if you buy the wrong stock or the stock fund is "trapped", the payback time may be three to five years or even longer.
Some investors said that when choosing to invest in financial management, bond base or stock market, they need to consider personal risk appetite, investment objectives, market environment and other factors, and high returns also mean that they need to take greater risks. As far as the market environment is concerned, the current environment may be similar to the "real estate turn + epidemic prevention policy turn + strong recovery sentiment" in the fourth quarter of 2022, when the 10-year treasury bond yield rose by about 35BP from the bottom, and at the same time, A-shares ushered in a round of upward movement. Under the expectation of economic recovery driven by the steady growth policy, the allocation of "fixed income +" wealth management, equity or hybrid funds can hedge the fluctuations of the bond market pullback, and the bond market adjustment and stock market rise depend on the real effect of the economy.
Written by: Huang Shunwei, reporter of Nandu · Bay Finance Agency