BEIJING, July 11, 2016 — PINTEC, China’s leading fintech platform, announces the launch of its intelligent investment advisory platform, XUANJI. XUANJI is a robo-advisory technology platform providing intelligent investment advice to Chinese investors. Zheng Yudong, CEO of XUANJI, promised that it will provide China’s burgeoning middle class with customized, automated and intelligent wealth management solutions. The launch of XUANJI marks the initiation of PINTEC’s “dual core” strategy, providing innovative financial technology solutions to service both sides of a consumer’s balance sheet.
Utilizing the framework of Markowitz’s Modern Portfolio Theory, XUANJI’s asset allocation solution combines quantitative modeling and machine learning with programmed trading, making it possible for investors to customize and automatically rebalance a global portfolio with greater efficiency and convenience.
XUANJI has three product offerings: an offshore USD asset version and an onshore RMB asset version that provide customized investment advice directly to individual investors, and a white-labeled B2B version, “POWERED BY XUANJI”, that can be customized to meet the needs of independent financial advisors, wealth management platforms, and financial institutions. The underlying assets of the offshore USD version are ETFs traded on US stock exchanges, while the RMB version utilizes PINTEC’s online mutual fund distribution license to allocate investor portfolios to a diversified basket of Chinese mutual funds. The white-labeled “POWERED BY XUANJI” version provides financial institutions with a customized robo-advisory solution that focuses on the asset types currently in their product portfolio, delivering a comprehensive technology solution that meets the digital needs of the financial institution’s existing client base.
Robo-investment advisory is a technology-based wealth management solution that provides automated investment advice based on Modern Portfolio Theory and big data algorithms. The development of this new market has been led by US platforms Wealthfront and Betterment, with traditional financial institutions like BlackRock, Goldman Sachs, RBS, and Vanguard Group also entering the market. Robo-investment advisors currently manage assets of more than$30 billion USD, and that number is expected to increase to $2 trillion USD by 2020, as projected by KPMG Consulting.
The Chinese wealth management industry has seen rapid growth in recent years. Over the last decade, China’s fast-paced economic development has led to a rapid rise in the affluence of its emerging middle class. On one hand, the new affluent do not have time to actively manage their investment portfolio, and on the other hand they have limited options in finding help investing their capital due to the high thresholds for private banking services. Given the volatility of China’s domestic stock market and real estate markets, there is large demand for diversified investment solutions that can be delivered by leveraging technology and the mobile device. “XUANJI aims to bring professional investment advice to individual investors, and to foster healthy asset allocation strategies,” said Zheng. He stated that XUANJI, by leveraging technology, is advancing financial service offerings to middle class clients, helping them cultivate long-term investment strategies and providing sound advice for a diversified portfolio.
“PINTEC hopes to become the engine that drives China finance into the future, leveraging technology to advance financial services and leveling the playing field,” said Allen Dong, CEO of PINTEC Group. He added that XUANJI’s role in the group would be to provide the average investor with access to private banking type services, pushing for equality in financial services.
PINTEC drives new financial product opportunities by expanding access to financial services for consumers, mitigating risk by decreasing human interference, and breaking down historical financial market barriers. PINTEC is leveling the playing field for consumers by creating innovative financial services solutions for the digital economy. PINTEC’s wholly owned subsidiaries include Dumiao, Xuanji, Hongdian Fund, Jimubox and 76hui.