Wealth management products with rights are in high demand; the number of new issuances in February has surged both month-on-month and year-on-year.

Financial Times Reporter Liu Xiaoyou

As it becomes increasingly difficult to achieve ideal returns through traditional coupon strategies, financial products with higher yield flexibility, such as those with embedded options, have been heavily promoted by many asset management companies at the start of the year.

According to data from China Wealth Management Network, as of February 26, there have been up to 32 new issuance of hybrid financial products with high embedded option ratios in February alone, a significant increase from 15 in January and 18 in February of last year, reaching the highest monthly sales levels in recent years.

February saw a notable rise in issuance volume

“The underlying strategy allocates 20%–30% of assets to stocks (favoring dividend-style stocks across the market), actively participating in offline IPOs in the Shanghai and Shenzhen markets, with the rest allocated to stable fixed-income assets,” said a client manager from a leading city commercial bank’s Shenzhen branch, describing a popular product called XXX. This product is a newly launched hybrid product by the bank’s asset management subsidiary, with a minimum holding period of 300 days, focusing on IPOs in the Shanghai and Shenzhen markets.

“We are currently promoting this product, and many private banking clients are requesting to reserve quotas. Previously, existing clients were quite satisfied with their holdings and repurchase rates,” the manager added.

This is not an isolated case. Currently, many banks are actively promoting high-embedded-option financial products. Recently, a branch of a South China joint-stock bank in Shenzhen has been selling a macro-allocation product with a one-year holding period, issued by its asset management subsidiary. Similar products in the same series, such as XX Macro Allocation 180-Day No.1, have achieved a net value growth rate of 7.28% over nearly six months, ranking among the top three in the industry for hybrid products.

Clearly, high-embedded-option financial products are gaining increasing market recognition. Data from China Wealth Management Network shows that since February, ICBC Wealth Management, Ningbo Wealth Management, Xingye Wealth Management, Bohai Wealth Management, Everbright Wealth Management, Agricultural Bank of China Wealth Management, China Post Wealth Management, Nanjing Wealth Management, Suzhou Wealth Management, Bank of China Wealth Management, and Ping An Wealth Management have issued a total of 32 hybrid products, covering strategies such as IPO plays, preferred stocks, and index rotation. Compared to 15 in January and 18 in February last year, this issuance volume has surged significantly, reaching levels comparable to October and November 2025, the highest in the past five years for a single month.

Yield flexibility stimulates channel sales enthusiasm

What drives the enthusiasm of sales channels? The underlying yield flexibility is undoubtedly a key factor.

Currently, there is no official data on the average annualized return of existing hybrid products in the market. However, according to professional agency Nanfang Wealth Management, as of January 29, 2026, a total of 128 publicly offered hybrid products with investment periods of 3–6 months (including different share classes) are still active. Among these, 28 products have achieved a net value growth rate of over 5% in the past six months, with nearly 70% of products concentrated in the 1%–5% growth range.

Additionally, independent research firm ProY Standard has been tracking performance benchmarks for different types of investment products. Its latest data shows that in January this year, the average performance benchmark for active open-ended hybrid products was 3.31%, compared to only 2.04% for fixed-income products, a difference of over one percentage point. For closed-end hybrid products, the average benchmark was 2.42%, also higher than the 2.35% for fixed-income products.

Multiple advantages support embedded option products

From another set of straightforward data, we can also glimpse the market’s strong interest in embedded option products.

Recent exclusive data from channels shows that the combined scale of the top 14 wealth management firms at the end of January was 24.59 trillion yuan. Despite a month-on-month decline of 815 billion yuan, the scale of embedded “Fixed Income +” and hybrid products within these firms still grew against the trend. The “Fixed Income +” products from these 14 firms increased by about 190 billion yuan in January, while hybrid products grew by approximately 58 billion yuan.

As market conditions continue to improve, the attraction of embedded option products to investors is also rising. Data shows that by the end of January, the Shanghai Composite Index had risen 3.76% since 2026, while the Shenzhen Component Index and ChiNext Index increased by 5.03% and 4.47%, respectively. The valuation recovery of stock assets has undoubtedly boosted the returns of hybrid products with stock allocations, naturally attracting more investors to subscribe.

Industry experts believe that sector-specific opportunities also support the returns of hybrid products. For example, the recent upward trend in new energy and non-ferrous metals sectors has significantly boosted the performance of products holding related assets. The continued strength of the gold market has also become an important factor in enhancing the returns of gold-strategy hybrid products.

Looking ahead to 2026, many market participants believe that whether at the strategic or technical level, further diversification across multiple assets and strategies to achieve higher yields will be a common approach in the asset allocation industry.

A Ping An Wealth Management representative said: “Currently, the company has set clear risk budgets and allocation guidelines around three volatility levels: low, medium-low, and medium. The investment decision committee regularly updates views and specifies ranges for stable asset proportions, durations, and embedded option usage rates. On the strategy side, we have built standardized pools including deposits, bonds, funds, quantitative strategies, overseas investments, and alternatives. Investment managers perform asset allocation and sub-strategy selection based on professional analysis, forming a closed-loop management process of ‘macro judgment—strategy allocation—performance attribution.’”

Tang Hujun, General Manager of Quantitative Investment at Ping An Wealth Management, believes that on one hand, in a declining interest rate environment, traditional fixed-income products face yield pressure, necessitating increased equity asset exposure to boost returns; on the other hand, with rising global market uncertainties, multi-asset allocation helps diversify risks, making hybrid products an important window for strategic deployment.