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Personal Investment Products - China - July 2018

“Investors who have an annual household income of over RMB 500,000 are actually not that different from general consumers in terms of investment experience and preferred products. They are pretty mainstream. High risk high return product preferers tend to be those who have a high educational background or 40-49-year-olds living in tier one cities. They seem to hold a positive perception towards their future financial status so they are bold and aggressive during investment.”

- Aaron Guo, Associate Director

This report will look at the following areas:

  • What features of investment products are worth highlighting?
  • Who are risk takers in investment and how to engage them?
  • Is AI challenging humans on investment?

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Table of contents

  1. Overview

    • Background
      • Covered in this Report
        • Excluded
        • Executive Summary

            • The market
              • Figure 1: Best- and worst-case forecast of personal investment market value, 2013-23
            • The consumer
              • High Income Investors do not necessarily have more investment experience
                • Figure 2: Years of investment experience, March 2018
              • No major change in investment products selected
                • Figure 3: Investment product ownership, March 2018
              • Allocating 11-30% of assets for high risk high return products is the norm
                • Figure 4: Allocation for high risk high return products, March 2018
              • Low risk is prioritised over high return
                • Figure 5: Important consideration factors of investment products, March 2018
              • Specialised platforms and financial newspaper/journals as valuable channels
                • Figure 6: Investment information channel - TURF Analysis – April 2018
              • Mintropolitans are no different from mainstream investors
                • Figure 7: Attitudes towards investment – CHAID – Tree output, April 2018
              • What we think
              • Issues and Insights

                • What features of investment products are worth highlighting?
                  • The facts
                    • The implications
                      • Who are risk takers in investment and how to engage them?
                        • The facts
                          • The implications
                            • Is AI challenging humans on investment?
                              • The facts
                                • The implications
                                • The Market – What You Need to Know

                                  • Market size doubles that of savings
                                    • The mixed market drivers
                                      • Convincing the investors in multiple methods
                                      • Market Size and Forecast

                                        • A CAGR of 16.8% over the next five years
                                          • Figure 8: Best- and worst-case forecast of personal investment market value, 2013-23
                                        • Represent over 30% of money supply (M2)
                                          • Figure 9: Comparisons between investment, demand deposit and M2 amounts, 2013-18
                                      • Market Factors

                                        • Slowing down but steady economic growth
                                          • Figure 10: GDP growth rate in China, 2014 Q1 – 2018 Q1
                                        • Upcoming personal income tax adjustment
                                          • The switch from property investment to financial investment
                                            • Figure 11: Consumer expenditure and growth rate, by selected sector, 2017
                                          • The promotion of internet finance platforms
                                            • Figure 12: Landing page of wealth management products on WeChat and Alipay
                                          • The aging society
                                            • Figure 13: China population structure, by age, 2013-22 (fore)
                                          • Monetary fund under tightening regulation
                                            • Under the shadow of a looming trade war
                                            • Market Activities

                                              • AI advisory
                                                • Highlighting the stability of investment products
                                                  • Figure 14: Renrendai’s new brand slogan campaign
                                                • Pop-up stores introduced by GuangFa Securities
                                                  • Figure 15: The pop-up store of GuangFa Securities
                                              • The Consumer – What You Need to Know

                                                • Young females have greater investment experience than males
                                                  • The majority allocate 11-30% for high risk high return products
                                                    • Term explanation makes a difference
                                                      • Traditional media has not been abandoned yet
                                                        • MinTs tend to follow the mainstream during investment
                                                        • Investment Experience and Investable Assets

                                                          • Average is six years of personal investment experience
                                                            • Figure 16: Years of investment experience, March 2018
                                                          • Longer personal investment experience of young females
                                                            • Figure 17: Average length of investment experience, by gender and age, March 2018
                                                          • Two in five have investable assets of above RMB 500k
                                                            • Figure 18: Amount of investable assets, March 2018
                                                          • 35-44-year-olds have the highest investable assets
                                                            • Figure 19: Amount of investable assets, by age group, March 2018
                                                        • Ownership of Investment Products

                                                          • Investors own over four different types on average
                                                            • Figure 20: Investment product ownership, March 2018
                                                          • 35-39-year-olds are the most passionate about personal investment
                                                            • Figure 21: Investment product ownership, % who own now, by age group, March 2018
                                                          • Males being more aggressive than females in product selection
                                                            • Figure 22: Selected investment product ownership, by gender and age group, March 2018
                                                        • High Risk High Return Investment Allocation

                                                          • A mainstream allocation of 11-30%
                                                            • Figure 23: Allocation for high risk high return products, March 2018
                                                          • P2P is not favoured by high risk high return investment preferers
                                                            • Figure 24: Investment products owned, by risky assets allocation, March 2018
                                                          • High Income Investors are similar
                                                            • Figure 25: Allocation for high risk high return products, by total and high net-worth investors, March 2018
                                                        • Important Consideration Factors

                                                          • Build brand reputation through term explanation is critical
                                                            • Figure 26: Important consideration factors of investment products, March 2018
                                                          • High risk high return product preferers care more about trade procedure
                                                            • Figure 27: product allocation differential by level of investment by risk (as benchmark) on selected important consideration factor claim rates, March 2018
                                                          • Popularity of the product is paid attention to by high school or below investors
                                                          • Investment Information Channel

                                                            • Online and offline channels are equally important
                                                              • Figure 28: Investment information channel, March 2018
                                                            • Females trust bank, while males trust specialised platform
                                                              • Figure 29: Gap between males and females (as benchmark) on the important information channel, March 2018
                                                            • Top two channels can reach up to three quarters of investors
                                                              • Figure 30: Investment information channel - TURF Analysis – April 2018
                                                            • Financial newspaper and journals are valued by high net-worth group
                                                              • Finance segment of internet media is worth attention
                                                                • Figure 31: Investment information channel, by number of years of investment experience, March 2018
                                                            • Attitudes towards Investment

                                                              • Risk aversion is the mainstream
                                                                • Figure 32: Attitude towards investment risk, March 2018
                                                              • Understanding the investment product is the basic rule
                                                                • Figure 33: Attitude towards investing products not understand, March 2018
                                                              • Follow the wind
                                                                • Figure 34: Attitude towards investment direction, March 2018
                                                              • AI advisory welcomed by 25-39-year-old females
                                                                • Figure 35: Attitudes towards investment – CHAID – Tree output, April 2018
                                                            • Meet the Mintropolitans

                                                              • MinTs means more than being wealthy
                                                                • Explorative and cautious at the same time
                                                                  • Figure 36: Allocation for high risk high return products, by consumer classification, March 2018
                                                                • MinTs care more about reliability and liquidity
                                                                  • MinTs tend to be mainstream investors
                                                                  • Appendix – Market Size and Forecast

                                                                      • Figure 37: Total market value of personal investment market, 2013-23
                                                                  • Appendix – Methodology and Abbreviations

                                                                    • Methodology
                                                                      • Fan chart forecast
                                                                        • Abbreviations

                                                                        Personal Investment Products - China - July 2018

                                                                        US $4,460.00 (Excl.Tax)