The Battle of the Two Giants in Fund Distribution: Ant Group and China Merchants Bank – Have They Become Each Other’s Former selves?
Hello everyone, I’m your financial journalist. Today, we’re going to discuss a very interesting phenomenon: in the world of fund distribution, Ant Group, once considered a “grassroots” player, and China Merchants Bank, once a “luxury” institution, have seemingly swapped roles.
In the past, people thought of Ant Group as the company that sold Yu’ebao and low-risk financial products, while China Merchants Bank was known for selling high-end equity funds and relied on financial managers for professional recommendations. But the latest data shows that Ant Group has become a leader in equity funds, while China Merchants Bank has become the guardian of low-risk fixed-income products.
This is not just about who sells more or less; it reflects the completely different profit-making strategies and business models of these two giants. Let me break down the fund distribution data for the first half of 2026 into five key points to help you understand this dramatic shift in their positions.
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1. The Core Reversal: Ant Group in a Suit, China Merchants Bank in a T-shirt
The first thing to note is this obvious change: a “genetic mutation.”
- Ant Group (from “Yu’ebao seller” to “equity expert”: When Ant Group first started around 2017, most of its users came from Yu’ebao, who were reluctant to move their money and only bought money market funds (safe, low-yield, but easy to withdraw). At that time, Ant Group had little presence in the equity fund market. But now, 60% of its non-money market funds are equity funds, and it has far surpassed its competitors in scale and growth. It has transformed from a platform that mainly sold low-risk products into a leader in the equity fund sector, especially in popular areas like AI and technology.
- China Merchants Bank (from “equity benchmark” to “low-risk protector”: In the past, China Merchants Bank thrived on its thousands of professional financial managers who could explain complex equity funds to high-net-worth clients. Now, only 47.2% of its non-money market funds are equity funds; the rest are bonds and other low-risk products. Its customer base has shifted towards seeking stability. Although equity funds are performing well, their proportion has been diluted by the increase in low-risk products.
In short, the online platform has adopted a more sophisticated approach to enter the challenging equity fund market, while the traditional bank has focused on maintaining its position in low-risk products.
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2. Why the Change? Ant Group’s “Funnel” Strategy and China Merchants Bank’s Shift in Investor Preferences
This shift is not accidental but the result of both companies’ strategies and external factors.
- Ant Group’s Evolution: Ant Group did something right with its step-by-step approach:
1. User base expansion: Yu’ebao brought in a large number of young users with a higher risk tolerance.
2. Funnel conversion: It started with short-term bonds and fixed-income products, gradually leading users to index funds (which track the market without the need for individual stock selection), and finally to equity funds.
3. Traffic strategy: Online platforms prioritize products that generate profits, so during bull markets, it promotes equity funds heavily, leading to rapid growth.
4. Index funds: Ant Group has heavily promoted index funds and C-class shares, which are less volatile and suitable for new investors.
- China Merchants Bank’s Change: The increase in fixed-income products is due to several factors:
1. Many conservative investors moved their money from bank products due to losses and declining interest rates.
2. Financial managers are focused on managing overall accounts, balancing stocks and other investments.
3. China Merchants Bank’s past focus on selecting high-quality funds meant it lagged behind in index fund sales.
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3. Profitability Comparison: Ant Group 2.3 Times That of China Merchants Bank
Who is more profitable? The data shows that Ant Group earns 0.59 yuan per $100 in non-money market fund assets, compared to China Merchants Bank’s 0.25 yuan. This difference is mainly due to:
- Product structure: Equity funds have higher margins and more revenue for distributors.
- Fees: Different fee structures (C-class shares generate continuous fees for the platform).
- Transaction frequency: Ant Group’s high transaction volume leads to higher overall revenue.
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4. Index Funds: The Future of Fund Distribution
Index funds are crucial for the future:
- Ant Group’s dominance: It holds a 63.13% market share in index funds, with rapid growth.
- China Merchants Bank’s effort: It is increasing its index fund offerings and focusing on long-term strategies.
- Pros and Cons: Ant Group’s advantage lies in its large scale and continuous fees from C-class shares, while China Merchants Bank’s growth is driven by financial managers’ product recommendations.
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5. The Future of the Two Giants
These two companies have evolved into two distinct business models:
- Ant Group: An online “fund supermarket” that thrives in bull markets.
- China Merchants Bank: A comprehensive wealth management platform.
For investors, this means that Ant Group is suitable for high returns and short-term trading, while China Merchants Bank offers stability and professional advice. The battle continues, with each company focusing on its core strengths.
This “battle of roles” is just entering its second half, and the future of the fund distribution industry is still uncertain.