In the first week of October, liquidity once again became loose, and the bond market stopped falling and stabilized, which may mean that the redemption wave of wealth management products that has been widely concerned for some time has come to a preliminary end.

Many wealth management companies have recently stated that as the bond market has recently fallen to a low level, the investment value of bank wealth management is becoming prominent, and the redemption of wealth management products should be viewed rationally. However, the practical problem faced by wealth management companies may be how to make more forward-looking predictions and refined management in future investment links.

The redemption wave may have come to an end

In the first week of October, supported by loose liquidity, the bond market bottomed out and rebounded, showing an upward trend across the board. Credit bonds, which have been suffering recently, have also ushered in a rebound, and interbank certificates of deposit have also shown an upward pattern.

Data shows that after the 10-year government bond yield rebounded to 2.26%, it has recently fallen by 13 basis points to around 2.13%. Chen Xi, the chief fixed income analyst at Kaiyuan Securities, believes that the recent stabilization and rebound of the bond market are related to the relatively loose liquidity and a slight decline in the stock market.

A bank wealth management investment manager told reporters from Shanghai Securities News that this means the liquidity impact caused by this round of redemption may have passed.

In mid-to-late September, the wealth management market was in a liquidity shock. Many institutions sold credit bonds to cope with redemptions and needed to add a large amount on the basis of market prices. Some traders revealed to reporters that the additional points for some credit bonds once reached as high as 100 basis points.

However, as the bond market rebounds, the wealth management market is warming up. Zhaoyin Wealth Management stated in an official microblog post that from the perspective of product managers, it is recommended that investors maintain a good attitude and wait patiently for the net value to be repaired. As income-generating assets, bond assets are expected to gradually repair the loss of short-term capital gains through coupon payments over time.

The stabilization of the bond market has also changed the negative feedback mechanism of wealth management.

"With the collective warming of the bond market since October 10, the negative feedback mechanism of redemption for fixed income asset management products such as bank wealth management has come to an end." Chen Xi believes that as the stock market enthusiasm cooled down in the first week after the National Day, residents' "sell bonds, buy stocks" impulse decreased, and the redemption impact on wealth management, bond funds, and money funds may have ended for the time being. At the same time, against the backdrop of gradually loose liquidity, bond yields may have a corrective decline.Forward-looking management becomes increasingly important

After experiencing this round of shocks, the importance of forward-looking asset allocation and liquidity management in bank wealth management has been highlighted, and all institutions need to enhance their ability to predict and respond.

During this round of peak redemptions, a large bank once announced that due to the total amount of customer redemption applications exceeding the limit, it had to suspend the quick redemption and consumption payment services of some cash management financial products on that day.

The person in charge of wealth management at the above-mentioned bank told reporters that after experiencing this redemption shock, banks will need to carry out more refined liquidity management in the future, scientifically predict market dynamics, and provide more timely judgment basis for asset allocation and liquidity management. At the same time, product design will also be more rational.

Previously, Schroders Bank Wealth Management actively reduced bond allocation during this round of rising bond market, and chose lower volatility liquidity assets as a substitute. Some fund companies also increased the allocation of equity assets against the background of the market's "fixed income" before, and launched a series of "fixed income +" products, effectively increasing the income.

In fact, internationally renowned asset management institutions have explored how to grasp sudden changes in investment styles. This year, BlackRock Group and JPMorgan Chase have used AI technology to fully pay attention to and price market change signals, in order to capture better entry points for asset allocation.

In addition, during this redemption shock, it is also worth thinking deeply about how to view customer investment preferences. Recently, some bank wealth management customers have chosen to redeem financial products and actively embrace A-shares. From a certain perspective, it reflects their diverse investment needs - as long as they can make a stable profit, they are not rigid in product attributes, which may also provide new ideas for the development of bank wealth management rooted in fixed income.

"As long as the customer's risk tolerance is in line, we are still actively developing a more diversified range of financial products and communicating with potential customers," the person in charge of the above-mentioned bank wealth management company told reporters.