China Merchants Bank Promotes The Localization Of China'S Global Asset Allocation Model

As one of the core competitiveness of private banking, the theory and technology of asset allocation have long matured in the field of overseas wealth management, and are still missing in the domestic market.

In June 15th, China Merchants Bank formally announced that after three years of R & D and a large number of product data collection and accumulation, the bank took the lead in releasing the "China localization" high-end customer global asset allocation model in order to promote the scientific management of high-end customers' wealth management and improve the way in which customer asset allocation mainly relied on the personal experience of customer managers.

Wang Jing, executive deputy general manager of the private bank of China Merchants Bank, said that the bank will not only vigorously promote the development of overseas investment products, but also make full use of the foreign platform of Wing Lung Bank for high-end customers.

The China Private Wealth Report, which was jointly issued by China Merchants Bank and Bain, showed that in early 2009, the high net worth individuals who invested more than 10 million yuan in assets in the early part of the year accounted for about 80% of the traditional investment categories represented by cash and deposits, stocks, real estate and funds. In 2011, the proportion of four types of assets dropped to about 70%, while other types of investment and bank financial products represented by the recent hot spots such as sunshine private placement and private equity investment increased by 5 percentage points and 4 percentage points in the portfolio of high net worth people, and more than 80% of the respondents indicated that they would continue to strengthen in the future in 2011.

These characteristics and trends show that the high end crowd's wealth management for commercial banks, especially high-end private banks.

The system considers all the bank deposits and all kinds of domestic and foreign investment products as a combination. It not only tells the customers how the profits and losses of all the assets are now, but also returns the historical returns, and more importantly, it will simulate future earnings.

After the system has been put into use, the investment advisors and senior customer managers of private banks use the "spiral upgrading four step method" to fully understand the needs and characteristics of customers, then select products suitable for customers from the product library. However, through this system, the optimal allocation ratio of these products can be achieved, and the expected profit and loss and probability of the portfolio will be calculated, and the risks faced by the assets portfolio can be measured to achieve the optimal solution.

After analyzing the model, the investment consultant can not only select the existing financial products to optimize the allocation, but also use Monte Carlo simulation to simulate the future performance of the assets portfolio in the longest five years.

It is understood that, as early as three years ago, the private bank of China Merchants Bank has begun the construction of the global asset allocation system. It has invited international consulting companies with high prestige in the field of system development as a system consultant, and has worked with the domestic analysts with profound mathematical and financial background for three years.

In the process, two major problems should be solved. One is how to combine the abstract mathematical theory of Finance with the actual financial products, making the system effective and practical.

The two is how to get the historical data of portfolio assets, so that the model calculation can be followed.

After overcoming all kinds of difficulties and collecting comprehensive data, China Merchants Bank's global asset allocation model came out.