At a recent asset management roundtable during the 2026 Sustainable Global Leaders Conference held in Shanghai, speakers from bank wealth management, insurance, and public mutual funds exchanged views on funding needs, equity allocation, risk budgeting, and long-term cash flows. Their discussion ranged from "identifying certainty assets" to how to define investment boundaries based on the nature of funds, and how to make multi-asset allocation genuinely deliver risk diversification.
Defining certainty starts with clients' funding needs
Xu Wenlong, Director of the Office at ICBC Wealth Management, said the certainty that bank wealth management pursues is not defined unilaterally by investment or operating institutions, but must return to how clients view and use wealth management products. In his view, clients do not treat bank wealth management as an asset allocation solution that meets all their investment needs. Funds with different risk levels and different maturities are not necessarily all arranged through bank wealth management; bank wealth management is only one link in a client's overall capital allocation. In a low-rate environment, clients still largely use bank wealth management to meet deposit substitution and stable, low-volatility needs. From a product structure perspective, industry risk levels are mainly concentrated in PR1 and PR2, with relatively short tenors, and investments remain primarily fixed income, extending toward "fixed income plus." Xu Wenlong divided the certainty clients need into three levels: first, low volatility and stable controllability; second, the achievability of return targets; and third, the experience throughout the holding period, including redemption settlement, usage scenarios, and client companionship. Taking redemption services as an example, he noted that the industry continues to shorten settlement times precisely to respond to clients' requirements for fund availability. Clients not only care about how much return they ultimately receive, but also whether funds can arrive in time when they need to use the money. In response to these needs, ICBC Wealth Management has built a factory-style, platform-based operating system on the investment side, and established a quality control management mechanism on the product side, hoping to make product tiering clearer and keep investment behavior and return-risk characteristics consistent with client expectations. Xu Wenlong said: "Clients have stricter requirements for low volatility, and institutions need to squeeze out overall returns basis point by basis point, improving the holding experience through refined management and the development of multi-asset and multi-strategy capabilities."
Sometimes exit discipline matters more than timing entry
How to balance return contribution and drawdown risk was another key focus of the roundtable. Dai Kang, General Manager of the Equity Investment Department at CMB Wealth Management, believes that the coexistence of low rates and high volatility reflects, on the one hand, a downward shift in the return center, and on the other hand, changes in the global order, industrial trends, and capital flows. The volatility brought by the geopolitical environment, AI industry transformation, and global capital reallocation is difficult to eliminate in the short term. Accordingly, he proposed a "barbell strategy": one end focuses on certain cash flows, and the other end focuses on certain industrial trends; for assets in between whose odds are unclear yet appear stable, it is necessary to be alert to risks that may be overlooked. In his view, this is not only a tactical investment tool, but also a way of organizing asset allocation in the new environment. However, for wealth management clients who place greater emphasis on stability and drawdown prevention, beyond allocation strategy, clear entry and exit rules are also needed. For stable funds, exit discipline is sometimes more important than choosing the timing of entry. Dai Kang emphasized that exit rules should be written clearly when preparing to enter. For example, reduce risk exposure when the risk budget reaches its upper limit, or set tiered adjustment arrangements according to different drawdown levels. If exit discussions only begin after market conditions change, decisions are easily swayed by the market. He also believes that holding the bottom line does not mean promising no losses in a strict sense, but rather keeping possible losses within a range that clients understand and accept in advance. This requires ex-ante risk budgeting and expectation management throughout the investment process.
Products and assets must fit each other
In the current market environment, when wealth management funds carry out multi-asset allocation, they need even more to adhere to a portfolio management approach of dynamic rebalancing. In the process of serving clients, we must not only clarify the return targets of products, but also define the behavioral boundaries and risk constraints of investment operations. Wu Weisen, General Manager of the Fixed Income and Project Investment Department at Hengfeng Wealth Management, introduced practices in management from three aspects: product fit, asset selection, and investment behavior control. She said that, first, products and assets must fit each other. Different wealth management products differ greatly in characteristics and need to be matched with underlying assets by category. For short-term open-ended products, it is necessary to focus on allocating assets with higher liquidity and fully ensure that daily subscriptions and redemptions remain stable and orderly; for closed-ended products with longer holding periods, it is possible to appropriately match assets with longer durations and relatively higher elasticity, and through diversified allocation, implement refined and differentiated management according to product characteristics. In asset selection, portfolios that meet wealth management funding needs should be built according to asset characteristics, using high-grade credit bonds as allocation instruments to obtain coupon income, focusing on high-dividend sectors on the equity side, while allocating public REITs, standardized ABS, and other assets with cash flows, and enhancing returns through low-risk strategies such as new share subscriptions, relying on the inherent attributes of various assets for allocation. Investment behavior requires institutional constraints. We adhere to putting risk budgeting first, locking in the overall risk exposure through risk budgeting, while routinely maintaining dynamic position balance, establishing contingency plans for volatility and drawdowns in advance, and strengthening liquidity management. Wu Weisen said that wealth management products should first select suitable assets according to product attributes, then build portfolios based on asset characteristics, and finally safeguard the risk bottom line with strict investment discipline, using this as a foundation to optimize multi-asset allocation in products.
Optimistic about long-term assets, but also increase investment research input
The long-term holding capacity of insurance funds cannot be simply understood as buying heavily and holding forever just because one is optimistic about an asset. Ruan Yang, General Manager of the Investment Management Department at Xinmei Life Insurance, said that in the field of multi-asset allocation, life insurance funds have a relatively long development history. In addition to traditional stocks, bonds, and fund assets, life insurance funds are also important participants in REITs, holding-type real estate ABS, equity investments, and other assets. In recent years, regulators have also opened up insurance funds' investment in gold. He believes that, from the perspective of overall portfolio management, when life insurance funds carry out multi-asset allocation, they need not only to fully consider the return and risk characteristics of the assets themselves, but also to evaluate asset suitability from the perspectives of asset-liability matching objectives and solvency occupation. Allocation actions should be carried out within the central allocation range of major asset classes and the permitted deviation range. For new asset categories, Ruan Yang emphasized that investment research input should be increased first to fully identify underlying risks. Taking holding-type real estate ABS, which has recently attracted relatively high attention from insurance funds, as an example, although they are all called holding-type real estate ABS, the underlying assets include shopping malls, warehousing and logistics, energy storage, wind power, and IDC, and the cash flow characteristics and risks faced by different underlying assets differ vastly. Moreover, these assets may be held for decades, and only by increasing investment research efforts and going deep into the perspective of industrial parties can one possibly gain a clearer understanding of the risk-return characteristics of the assets over the coming decades. Only with a clear understanding does one have the qualifications to discuss investment allocation.
In multi-asset allocation, risk is already formed when the portfolio is designed
In multi-asset allocation, how should the certainty of assets be understood? When should risk management begin? Huang Hua, Chairman of the Multi-Asset Investment Decision Committee and Director of the Multi-Asset and Solutions Investment Department at China Europe Fund, believes that there is no "certainty asset" applicable to all asset management institutions. Different types of institutions, due to differences in liability-side characteristics, capital attributes, and investment objectives, also have different risk-return requirements for the same type of asset. He used 30-year government bonds as an example to explain that for insurance institutions, they can play the function of long-term asset-liability matching; but for public mutual funds, they may be more reflected as phased trading opportunities. The same type of asset, under different institutions' investment frameworks, performs different functions, and the risks it faces and corresponding management requirements also differ. Huang Hua believes that the core capability of multi-asset investment is risk management. Allocation cannot start only from seeking yields; it is also necessary to first arrange risk budgeting according to liability-side needs, and then build portfolios accordingly. In his view, if investment decisions always revolve around market opportunities, they are easily affected by short-term market conditions and market sentiment. Starting from risk management, by contrast, helps establish a clearer and more stable investment framework, clarifying which risks the portfolio needs to bear and to what extent it can bear them. Among these, he pays particular attention to expected volatility and tail risk. "Risk does not appear only after the portfolio is built and actually put into operation. When an institution determines capital attributes, expected returns, and strategy arrangements, risk has actually already been formed. The difficulty lies in managing the portfolio with future expected volatility at the core, rather than merely using historical data to prove that a strategy is effective," Huang Hua said. Historical data and backtesting models can provide references for investment decisions, but cannot simply be equated with future actual performance. Even if a strategy performs well in historical backtests, after entering a real market environment it may still face volatility beyond historical experience. At the same time, tail risk also needs to be managed separately. Taking assets such as gold and silver as examples, Huang Hua pointed out that these assets experienced drawdowns beyond historical experience in some market phases. This means that multi-asset allocation must not only focus on the overall risk distribution of the portfolio, but also fully assess the potential risks of a single asset type under extreme scenarios, enhancing the portfolio's ability to cope with complex market environments. To make risk management truly run through the entire investment process, investment and risk control teams also need to form synergy. Huang Hua introduced that in recent years, the multi-asset team has continued to promote consensus between investment and risk control in risk cognition, quantitative methods, and expression standards, while also emphasizing the role of professionals with investment experience in risk management, promoting understanding and collaboration between investment and risk control. In his view, risk management is not only a technical task, but also a systematic project involving organizational coordination and process development. Only when investment and risk control identify risks, measure risks, and discuss risks based on unified standards can risk management move from concept to practice and truly integrate into every link of portfolio construction and investment decision-making.
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