CHINESE investors piled into wealth management products in the first half of the year, a report released Friday showed, despite rising concerns by regulators over the products’ risks.

    A report issued by the China Banking Wealth Management Registration System showed that China’s banking system had a total of 12.65 trillion yuan (US$2.04 trillion) in outstanding wealth management products at the end of June, up 24 percent from the beginning of the year.

    Products issued by banks in the first half of the year offered an average annualized return of 5.2 percent to investors, the report showed, much higher than the maximum 3.3 percent interest rate banks can provide on their one-year deposits.

    The report also said that 31 products due during the first six months led to losses, which accounted for only 0.04 percent of the total products met their maturities in the same period. Almost 60 percent of outstanding wealth management products by value were bought by retail customers, with institutional investors, private banking clients and interbank funds accounting for the rest, the report said.

    As signs emerge of weakening demand and rising default risks for higher-yield trust products, sales of the wealth management products may keep surging.

    “Compared with trust products, wealth management products are less risky,” said Cao Yang, an analyst at a Shanghai-based bank.

    Trust companies’ assets under management fell in June, the China Trustee Association said Aug. 11. Investors have protested outside some banks this year after delays in trust product payments.

    Wealth management products typically require a minimum investment of 50,000 yuan, while trusts target wealthy clients with a minimum investment of 1 million yuan. (SD-Agencies)