Bullish on high dividends, gold, and REITs: A practical roadmap for multi-asset strategies in bank wealth management

By Yang Lian, Edited by Li Hengchun

Against the backdrop of asset price volatility since the fourth quarter of 2025, the wealth management industry's multi-asset strategy is returning to its roots of 'steady growth,' entering a critical phase of strategy optimization, capability restructuring, and landscape reshaping.

Since the launch of the net value transformation under the new asset management regulations in 2018, the banking wealth management industry has undergone multiple transformations, including breaking the rigid redemption, phasing out funding pools, and switching valuation methods. It has gradually moved away from the era of expected returns into a new epoch of net value measured by fair value. In this process, the low-interest-rate environment squeezed the return space of traditional fixed income, the large-scale redemption wave triggered by the bond market adjustment at the end of 2022, and the regulatory halt of multiple valuation smoothing measures by 2025, which required year-end rectification. These factors collectively drove bank wealth management from reliance on single fixed-income to a new paradigm of strategies based on 'fixed income+' with multi-asset synergy enhancement.

Currently,The multi-asset strategy has become a core pathway for bank wealth management to seek balance between returns and volatility, absorb household savings migration, and meet the core demands of low-risk clients.However, since the fourth quarter of 2025, amid A-share market fluctuations and synchronized asset price movements, this strategy has faced challenges, prompting the wealth management industry to enter a critical stage of strategy optimization, capability restructuring, and landscape reshaping.

The difficulty of balancing returns and volatility has increased.

According to data released by the Banking Wealth Management Registration and Custody Center, as of the end of 2025, the scale of the bank wealth management market reached 33.29 trillion yuan, a record high, with products related to multi-asset strategies showing a pattern dominated by mixed-class products and supplemented by equity-class products.

By the end of 2025, the size of fixed-income products was 32.32 trillion yuan, accounting for 97.09%; the size of mixed-class products was 870 billion yuan, accounting for 2.61%, an increase of 0.17 percentage points from the beginning of the year, making them the core carrier of multi-asset strategies; the size of equity products was only 80 billion yuan, accounting for less than 0.25%; commodity and financial derivative products had a size of 20 billion yuan, with an even smaller share.In terms of incremental growth, mixed-class products from leading wealth management companies grew by over 300 billion yuan in 2025, becoming a core direction for industry structure optimization.

Based on their strengths in fixed-income research and investment, customer risk preferences, and gaps in equity capabilities, banks have chosen an incremental path of 'fixed income foundation with diversified enhancement.' Initially centered around 'fixed income+,' they allocate small amounts of equities, convertible bonds, and other assets to control volatility. Subsequently, they gradually increase the proportion of mixed-class products, expanding into REITs, commodities, overseas assets, and quantitative strategies, building a truly multi-asset portfolio.

The current multi-asset strategy in bank wealth management revolves around the core objectives of 'controlling drawdowns and enhancing returns,' forming two practical directions: 'structured products + arbitrage strategies' and 'fixed income base + diversified allocation,' catering to different risk-return needs.

On the product side, innovation in structured products and exploration of arbitrage strategies drive growth in tandem.On one hand, there is an increased focus on developing structured products linked to broad-based indices and sector indices. By embedding options, shark-fin clauses, and similar terms, these products lock in maximum downside risk while retaining upside market potential, precisely catering to demand for medium-to-low volatility returns. On the other hand, low-correlation strategies such as market neutrality, fundamental quant, convertible bond arbitrage, and cross-market arbitrage are being explored. The returns from these strategies stem from correcting pricing discrepancies or relative value changes between assets, showing minimal correlation with traditional directional investments. They effectively hedge systemic volatility and provide stable excess returns.

On the allocation side, reinforcing the fixed-income safety cushion and diversifying across multiple asset classes work together in synergy.Equity exposure has generally been reduced at the core level to strictly control overall volatility. In fixed income, higher-grade credit bonds are being added to the portfolio to strengthen the safety net, while interest rate bond trading and moderate duration extension are utilized to enhance base returns. For diversified allocation, assets with low correlation to equities—such as REITs, gold, commodities, and overseas high-dividend assets—are being increased to reduce reliance on a single market and smooth out net value fluctuations.

Since the fourth quarter of 2025, China’s A-share market has experienced consolidation with accelerated sector rotation and heightened volatility. Coupled with increasing global macroeconomic uncertainty and fluctuating inflation expectations, multi-asset strategies in bank wealth management face multiple challenges. Traditional diversification logic has temporarily failed due to unexpected market volatility, increasing pressure on strategy drawdown control.

Bank wealth management clients have extremely low tolerance for drawdowns.Following the transition to net-value products, the industry established a “rigid drawdown constraint.” However, extreme market conditions since early 2026 have put this constraint at risk of being breached.Influenced by geopolitical conflicts in the Middle East and expectations of tightening global liquidity, major asset classes such as equities, bonds, gold, and commodities have seen “co-resonant declines,” with asset correlations sharply rising. The effectiveness of traditional multi-asset diversification has significantly weakened. Some equity-containing mixed wealth management products have experienced notably larger short-term drawdowns, exceeding investors’ psychological thresholds.

The core logic of traditional multi-asset allocation lies in using low asset correlations to diversify risk. However, this logic faces challenges under extreme macro-environmental shocks. Current market pricing is influenced by intertwined factors such as economic resilience, persistent inflation, monetary policy, and geopolitical conflict risks. Assets react more sensitively to marginal information, and price linkages have strengthened. When all assets are exposed to macro-risk factors like interest rates and liquidity, changes in a single factor can trigger synchronized volatility, leading to “diversification without risk avoidance.” This exposes the shortcomings of traditional multi-asset allocation, which focuses on asset class diversification but neglects risk factor dispersion, thereby making it harder to balance returns and volatility.

On one hand, in a low-interest-rate environment, fixed-income returns continue to decline. If multi-asset strategies allocate too little to equities and alternative assets, returns may struggle to surpass the pure fixed-income ceiling, failing to attract deposits. On the other hand, increasing allocations to risky assets would significantly raise portfolio volatility, exceeding client risk tolerance and triggering redemption risks. Meanwhile, stricter regulatory requirements on product net value fluctuations and disclosures have continuously compressed the industry's balancing space between “return enhancement” and “volatility control,” leaving strategy positioning in a dilemma.

Multi-asset strategies still have room for development

Short-term volatility tests will not change the long-term direction of multi-asset allocation in bank wealth management but will instead accelerate industry strategy optimization and capability upgrades. In the future,bank wealth management's multi-asset strategy will return to its essence of 'steady value appreciation,' moving from 'simple diversification' towards 'refined risk balancing'achieving comprehensive upgrades in asset classes, strategy tools, investment research systems, and product forms to better adapt to market environments and customer needs.

From an asset allocation perspective, fixed income remains the core advantage of bank wealth management. Going forward, there will be further optimization of the fixed-income base configuration while increasing the proportion and quality of multi-asset allocation. On the fixed-income side, while maintaining the dominant position of high-grade credit bonds, the portfolio duration will be moderately extended to capture coupon returns. Derivatives such as government bond futures will be used to hedge interest rate risks, isolating directional volatility; expanding into high-quality non-standard assets and private bonds to increase fixed-income returns within compliance boundaries.

In terms of multi-assets, REITs, gold, commodities, high-dividend blue chips, and overseas assets will transition from 'optional allocations' to 'standard configurations,' with their allocation ratios steadily increasing. Among these, the high-dividend strategy, due to stable dividends and lower volatility, will become a core direction for equity enhancement. Overseas asset allocation, leveraging QDII and cross-border wealth management channels, will shift from single markets to global diversification, mitigating regional risks.

As investment research capabilities improve, bank wealth management will deepen the application of derivatives and quantitative strategies, with product forms becoming more refined and customized. Structured products will see further innovation, with underlying linked assets expanding from broad-based indices to sub-industries, thematic indices, and cross-border indices, offering richer option structures to meet clients' precise risk-return requirements. Arbitrage strategies will evolve from exploratory phases to scale implementation, with market-neutral, statistical arbitrage, convertible bond arbitrage, and cross-commodity arbitrage strategies taking up a larger share, becoming a key source of stable returns. Additionally, specialized multi-asset products such as 'risk parity,' 'target volatility,' and 'retirement target' funds will be introduced, clearly defining risk positioning and return objectives to suit different client risk preferences and investment horizons.

Investment research capability is the core support for multi-asset strategies, and in the future, bank wealth management will accelerate the construction of a professional multi-asset investment research system:First, enhance talent pipelines by increasing the recruitment and training of professionals in equities, alternatives, derivatives, and quantitative fields, building a 'fixed income + multi-asset' composite investment research team. Second, establish a multi-asset investment research framework, creating a research system covering macro, meso, and micro levels, strengthening core competencies in asset rotation, sector style selection, and strategy effectiveness evaluation. Third, upgrade risk control and system construction, establishing a multi-dimensional risk monitoring system to enable real-time tracking of portfolio volatility, drawdowns, concentration, and risk factor exposures; leverage fintech to optimize asset allocation models, improving the intelligence of dynamic rebalancing and risk warning.

Multi-asset strategies place high demands on investment research, talent, and risk control, leading to an industry landscape characterized by 'concentration at the top and differentiated competition.' Leading wealth management subsidiaries of state-owned banks and joint-stock banks, leveraging advantages in capital, talent, and distribution channels, will be the first to achieve scaled and professional operations in multi-asset strategies, gaining leading positions in hybrid products, structured products, and cross-border products. Smaller wealth management firms will adopt differentiated strategies based on their resource endowments, focusing either on regional high-dividend assets, specific alternative assets, or low-volatility 'fixed income+' products, avoiding head-on competition with top-tier institutions. Meanwhile, regulatory encouragement of long-term capital inflows and policies allowing wealth management companies to participate in private placements and IPO allotments will further unlock the development potential of multi-asset strategies.

(This article was published in the April 11 issue of the Securities Market Weekly.)

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