Where to begin
Open Source Securities has released a research report indicating that the low-interest-rate environment is expected to persist through the first half of 2026, alongside a buoyant equity market. This is driving a continuous rise in household risk appetite, leading to a trend of household deposits migrating toward the non-banking financial system.
Specifically, the growth in public fund scale has fully benefited from favorable market conditions, while diversified products like FOFs have seen faster expansion. The rapid growth of private fund scale confirms improving risk preferences among high-net-worth clients. Wealth management and insurance premium income are growing steadily, and low-volatility products are poised to attract household deposits as risk appetite improves. As household risk aversion eases and deposits shift, wealth management is set for development opportunities, benefiting brokerages' large wealth management businesses and supporting sustainable high-quality growth in insurance company liabilities. The non-banking sector's valuation and institutional holdings remain at historical lows, and the report expects brokerages and insurers to outperform in the second half of the year.
Core insights from Open Source Securities
Household risk appetite shows signs of recovery, deposits shift to non-banking sector
In the first half of 2026, the tech sector drove an overall uptrend in the stock market. The Star 50 and ChiNext 50 index rose 59%, while the CSI 300 index gained 8%. Fund performance was strong, with the active equity fund index up 26% and the CSI bond fund index up 8%. New A-share accounts opened in the first half year totaled 20.16 million, a 60% year-on-year increase, reflecting significant growth.
From January to June 2026, household deposits increased by 7.6 trillion yuan, 3.2 trillion yuan less than the same period in 2025. In contrast, non-banking deposits rose by 4.9 trillion yuan, 2.4 trillion yuan more than the same period last year. The growth rate of household deposits lagging behind the M2 money supply growth indicates a rise in household risk appetite, with a clear trend of deposits moving into the non-banking system.
Net asset value rise in Q2 drives net redemptions in equity funds, FOFs see net subscriptions, private fund scale surges year-on-year
Public funds: Non-money market fund scale grew, while net redemptions in stock ETFs weighed on equity fund share growth. FOFs saw notable net subscriptions. As of the end of June 2026, the scale of non-money market funds stood at 24.0 trillion yuan, up 6% from the start of the year, with shares of 17.4 trillion units, an increase of 0.4 trillion units or 3%. Equity-oriented funds (excluding money market and bond funds) had a scale of 11.9 trillion yuan, up 2% from the start of the year, with shares of 7.6 trillion units, a decrease of 0.28 trillion units. Stock ETFs had a scale of 2.6 trillion yuan, down 31% from the start of the year, with shares of 1.9 trillion units, a decrease of 0.33 trillion units. Excluding stock ETFs, equity-oriented fund shares were 5.7 trillion units, up 1% from the start of the year, with Q1 shares up 6% and Q2 down 5%, reflecting a strong counter-cyclical subscription and redemption pattern among individual investors (unit net asset value fell 2% in Q1 and rose 19% in Q2). The significant net asset value increase in Q2 led to net redemptions. Bond funds, FOFs, and QDII funds saw scale increases of 11%, 37%, and 9%, respectively, from the start of the year, with share increases of 8%, 36%, and 8%. FOF scale grew by 800 billion yuan from the start of the year, becoming a key recipient of deposit outflows.
Private fund scale saw notable growth, reaching a record high. As of the end of June 2026, the total scale of private funds was 23.7 trillion yuan, up 17% year-on-year. Private securities investment funds recorded 8.0 trillion yuan, a 44% year-on-year increase, up 1.0 trillion yuan or 13% from the start of the year, hitting a new historic high. In the first half of the year, newly registered private fund scale was 587.2 billion yuan, with private securities investment funds newly registered 346.0 billion yuan, up 88% year-on-year.
Wealth management scale and insurance premium income grow steadily, with year-on-year growth rates slowing
Bank wealth management product growth has slowed, while fixed-income fund scale steadily increased. As of the end of June 2026, the total scale of bank wealth management products was 31.9 trillion yuan, up 5% year-on-year, but essentially flat from the start of the year. The growth rate of the total scale has decelerated (growth was 7% in the first half of 2024 and 2% in the first half of 2025). Among them, cash management, fixed-income, hybrid, and equity products changed by -10%, +2%, +21%, and -9% from the start of the year, respectively.
Insurance premium income rose year-on-year, but the growth rate slowed slightly. From January to June 2026, life insurance company premium income was 2.9 trillion yuan, up 3.7% year-on-year, a slight deceleration from the 5% growth in the first half of 2025, mainly due to a higher base and the deepening impact of the bancassurance channel's "single reporting and single execution" policy.
Recommended investment portfolio
GF Securities Co Ltd, CICC H, Haitong Securities (formerly Huatai Securities), China Pacific Insurance, China Life Insurance; Guotai Junan Securities (formerly Guotai Haitong), CITIC Securities, Ping An Insurance Group; Caitong Securities, Hithink RoyalFlush; Hong Kong Exchanges and Clearing.
Risk factors: Policy uncertainty; significant market volatility; sustained macroeconomic downturn.