Against a backdrop of persistently low interest rates and a scarcity of quality assets, bank-affiliated wealth management subsidiaries are increasingly turning their focus to the equity market.
From cornerstone investments in Hong Kong IPO listings, to offline subscription for A-share IPOs, along with participation in private placements, ETF investments, and "fixed income plus" strategies, bank wealth management capital is becoming more deeply and frequently involved in the capital markets. This trend has been further accelerated by regulatory encouragement for long-term capital to enter the market and the qualification of wealth management products as Class A offline investors, broadening the pathways for these subsidiaries. "IPO subscription" has become a key lever for them to enhance returns and expand their product offerings.
Recent disclosures from several bank wealth management subsidiaries indicate a significant increase in their participation in Hong Kong IPOs and offline A-share subscriptions this year, with some products delivering standout performance. As yields on traditional fixed-income assets continue to decline, equity-enhanced strategies are emerging as a crucial avenue for wealth management firms to pursue higher returns.
**Growing Enthusiasm for IPO Subscriptions**
Bank wealth management subsidiaries have been notably active in primary markets this year.
On May 9, CMB Wealth Management disclosed that its Hong Kong IPO subscription strategy recently participated in new share offerings for companies including Innovation Industrial, Huayan Robot, Qunhe Technology, Changguang Chenxin, and Xizhi Technology, covering hot sectors like green manufacturing, smart manufacturing, semiconductors, and optoelectronic computing. Wind data shows that as of the market close on May 18, the cumulative gains for these stocks reached 86.57%, 4.59%, 153.94%, 113.14%, and 293.56%, respectively.
This strategy has been integrated into the "Global Select Daily Open 14-Month No.1" product. CMB Wealth Management reported that as of May 6, 2026, the product achieved an annualized return of 11.51% over the past month and 3.4% since inception. The product employs a "global fixed income plus" structure with a 5% equity allocation core and carries an R3 (medium risk) rating. The company also stated plans to launch a "Hong Kong IPO Subscription + Market Neutral Strategy" product series between May and June to continue capturing opportunities in the Hong Kong IPO market.
Beyond Hong Kong, offline A-share IPO subscription has also become a key focus for wealth management subsidiaries.
Ningbo Bank Wealth Management stated on May 8 that since pioneering direct investment in offline A-share subscriptions in early 2025, the number of its wealth management products involved in this business has exceeded ten, making it the leader among bank wealth management firms in this area. As of the end of April 2026, Ningbo Bank Wealth Management had participated in 64 new share subscriptions on the Shanghai and Shenzhen exchanges, successfully securing allocations in 60 of them, achieving a 94% success rate.
Concurrently, ICBC Wealth Management reported that as of April 28, it had participated in 16 Hong Kong IPO investments this year with a 100% success rate and a weighted investment return exceeding 100%. This included acting as a cornerstone investor in several semiconductor, new energy, and advanced manufacturing projects. The company has established a "fixed income plus Hong Kong IPO" strategic framework, where the underlying assets primarily consist of stable holdings like deposits and high-grade credit bonds, supplemented by Hong Kong IPO investments for enhanced returns.
A representative from a joint-stock bank's wealth management unit noted that against the current backdrop of compressed bond yields, traditional fixed-income products face pressure from declining returns. However, the periodic recovery in the Hong Kong IPO market and a decrease in instances of stocks falling below their issue price post-listing have provided a new source of returns for wealth management capital. "IPO subscription returns in the primary market have regained appeal, especially for certain technology projects in Hong Kong, which have shown significantly increased elasticity following improved market sentiment."
**Policy Opens Institutional Pathways**
The accelerated entry of bank wealth management capital into the equity market is closely linked to changes in the regulatory environment.
In March 2025, bank wealth management products were formally included as Class A priority allotment targets in IPO offline subscriptions. Following this, several wealth management subsidiaries began to expedite their布局 of offline subscription businesses.
Data from the Shenzhen Stock Exchange shows that as of April 28, 2026, major bank wealth management subsidiaries had submitted a cumulative total of 187 bids, an increase of nearly 90% compared to early March. Among them, Ningbo Bank Wealth Management submitted 114 bids and received allocations for all; CIB Wealth Management submitted 52 bids, also achieving full allocation; and Everbright Wealth Management submitted 21 bids, with 18 successful allocations.
As participation frequency increases, the forms of engagement for wealth management subsidiaries are also diversifying. They have expanded from initial A-share offline allotments to encompass a broader range of equity investments, including Hong Kong cornerstone investments, listed company private placements, and ETF allocations.
An expert stated that wealth management capital participating in financing for technology innovation enterprises through IPO strategic placements and private equity wealth management products represents a significant breakthrough in the equity-oriented development of bank wealth management. Previously, bank wealth management was more concentrated in fixed-income assets. The regulatory grant of Class A investor status has effectively opened an important institutional pathway for participation in primary markets.
However, it was also pointed out that bank wealth management capital still faces inherent constraints in equity investment. On one hand, the overall risk appetite of wealth management clients is relatively low, which presents a mismatch with the high volatility characteristic of equity investments. On the other hand, constrained by asset management regulations, wealth management products generally have shorter durations, making it difficult to fully align with the longer growth cycles of technology companies.
**"Fixed Income Plus" as the Primary Vehicle**
Current practices show that "fixed income plus" remains the predominant product structure for bank wealth management's participation in the equity market.
The so-called "fixed income plus" strategy uses low-volatility assets like bonds as the core portfolio to control net value fluctuations, while seeking enhanced returns through strategies involving stocks, IPO subscriptions, and convertible bonds.
ICBC Wealth Management stated that its "fixed income plus Hong Kong IPO" strategy primarily uses fixed-income assets to build a safety cushion, while obtaining excess returns by carefully selecting Hong Kong IPO projects to balance risk and return.
Industry insiders believe that compared to individual investors directly participating in Hong Kong IPO subscriptions, wealth management products possess more distinct professional advantages.
A securities asset management professional noted that ordinary investors often face challenges with Hong Kong IPO subscriptions, including higher account opening thresholds, lower proportions of shares in public offerings, higher financing costs, and limited stock-picking capabilities. In contrast, wealth management subsidiaries can leverage institutionalized investment research systems, capital scale, and allotment advantages to participate in primary markets more efficiently.
"The Hong Kong IPO market itself has a relatively high professional barrier, requiring judgment not only on industry prospects but also on the reasonableness of issuance pricing. Institutional capital is more easily able to develop batch-based and systematic participation capabilities," the professional added.
Notably, some of these products have already begun to realize returns. On May 6, Everbright Wealth Management announced the early termination of its "Sunshine Orange Xinying IPO Strategy Preferred Target Gain Phase 3" product because it reached its profit-taking target. The product was originally scheduled to mature in November 2026 but concluded operations early after its annualized return met the target level for two consecutive valuation days during the observation period.
**Equity Investment Capabilities Still Need Enhancement**
Despite the accelerated entry of bank wealth management capital into the equity market, the industry widely acknowledges that the development of their equity investment capabilities is still in its early stages.
A representative from a large public fund stated that historically reliant on bond investment systems, bank wealth management still lags behind public funds and securities asset managers in areas such as equity research, industry coverage, valuation and pricing, and trading capabilities.
"True equity investment involves more than just participating in IPO subscriptions; it requires a complete system encompassing industry research, market timing, and risk control," the representative said.
Currently, bank wealth management subsidiaries primarily focus on relatively lower-risk primary market strategies, showing a particular preference for the "fixed income plus IPO subscription" model, while remaining generally cautious about active equity investments in secondary markets.
An expert from China Postal Savings Bank noted that the entry of wealth management capital into the equity market helps increase the proportion of equity assets in household wealth allocation and can provide more long-term funding sources for the capital market. However, in the long run, wealth management subsidiaries still need to strengthen their equity investment research systems and enhance risk management capabilities.
The expert believes the future development direction for bank wealth management's equity investment lies in two areas: continuing to enrich the "fixed income plus" product ecosystem, and gradually improving capabilities in long-term equity investments, including index-based investments, ETF allocations, and quantitative strategies.
Industry professionals believe that against the backdrop of ongoing regulatory encouragement for long-term capital入市, bank wealth management subsidiaries are becoming a new source of incremental capital for the capital markets. As return pressures intensify and client needs evolve, the trend towards greater equity allocation in wealth management capital is expected to deepen further. However, achieving a balance between risk and return, and establishing investment research systems compatible with equity markets, will continue to determine their future development potential.
Comments