Structured savings or structured finance?Belong to deposit or finance, you will understand after reading this article
As the name suggests, it has a “structure.”Both structured deposit and structured finance belong to structured products, which can be simply regarded as a “deposit with financial management”.Structured products themselves are composed of two parts: “deposit part” and “linked derivatives”, which can be directly understood as “deposit part” + “financial management” part.The deposit part: just like ordinary deposits;Principal and interest guaranteed, protected by the amount of insurance claims within 500,000 yuan.Financial management: derivatives linked to an underlying product;Usually it’s options.Option is a complex derivative product. Investing in option is equivalent to buying a right to buy and sell a certain number of underlying assets at an agreed time and price.If you don’t know about option investing, it simply means making a high-risk investment.Deposit part does not have what to say commonly, manage money part, need investor attention.Because its investment range is very wide, can be linked to the stock index, gold, interest rates, foreign exchange, oil and so on;They can be long (calls), short (puts), profitable in a range (butterflies), and even subject to certain conditions (barriers).Therefore, when buying structured deposits, one should not only look at the expected return range, but also carefully read the instructions of financial products to see the underlying assets linked to the products and the corresponding profit conditions.”Structured deposit” financial management, not with the principal to invest, but with a portion of the interest to invest.Investment and financial management, as we all know: the so-called “income”, but assume the corresponding risk, in return for the risk compensation.So, one share of risk, one share of benefit.How do structured deposits achieve high returns under the condition of capital preservation?There is a concept of a “safety pad” involved.As mentioned above, structural deposit is divided into deposit and financial management.Among them, the capital source of financial management part is the partial interest generated by the deposit part.For example: 1 million one-year structured deposit, assuming the deposit interest rate is 4%, the expected interest return is 40,000 yuan.A portion of your expected earnings, say 50%, will be invested in venture capital, which is $20,000, as part of your “wealth management” fund.The other half of the interest is a “safety cushion” that guarantees investors against loss of principal in the worst-case scenario and a portion of the return.So, how do you calculate the yield that eventually matures?If the financial management part, the investment is successful, for example, 20,000 yuan becomes 40,000 yuan (option investment, doubling is really not uncommon) : the total return is 20,000 yuan (safety cushion) + 40,000 yuan (financial management part) = 60,000 yuan, an annual return of 6%.If the financial management part, the investment loss, such as 20,000 yuan lost (option investment, loss is really not uncommon) : the total return is 20,000 yuan (safety cushion) +0 (financial management part) = 20,000 yuan, an annual return of 2%.If you get a slight gain on the money management part, you’re going to get something in between.This is a typical structured deposit with an expected annual return of 2% to 6%.Silly can’t tell the historical reason.Why do people feel confused about “structured deposits”? Because in the early years, the banking industry was committed to getting rid of the dependence on the interest difference between deposits and loans and vigorously developing intermediate business and off-balance sheet business.One of the assessment indicators is the sales of financial products.At that time, good performance was not enough for a branch or outlet. The source of income should not be mainly deposits and loans, but other off-balance sheet businesses.At the extreme, the better the off-balance sheet business, the more likely it is to be recognized and rewarded.Banks’ sales channels naturally have an incentive to wrap structured deposits in a fashionable outfit called “capital preservation”.In this way, the on-balance-sheet performance of deposits and loans will be successfully transformed into off-balance-sheet performance of financial sales.New regulations on self-financing are issued, which do not allow newly issued wealth management products to promise “capital preservation”.So what?It is good to do, and then these “capital preservation financial management” a pick, and restore the cost of the name of the “structural deposit”.So since 2019, the size of structured deposits has risen sharply, approaching the $10 trillion mark by the end of that year.In fact, the money is the same money, the product is the same product, just under a different name.In addition, the “fake structural deposit” is not to say that it is a scam.The fake structure, the fake structure, is mainly the source of the high returns, not from the venture part, which is the wealth management part, but from the deposit part.Or use an example to illustrate, for example, Tou Shuai issued a structured deposit with a yield of 3%-5%. If the Shanghai Stock Index is linked to Shanghai stock Exchange, if the market closes above 3000 points in three months, the annual yield of this structured deposit will be 5%.Otherwise it’s 3%.But now the market is around 3500, and the possibility of falling below 3000 in three months is very small. Whoever buys this structured deposit can get the upper limit of 5% income when maturity is most likely.The risk part, however, is actually risk-free (it is hard for the market to fall below 3000 in the short term).No yield, no yield, so where does that 5% yield come from?Without a doubt, it depends on the savings part.From the regulatory point of view, this product is in fact the early years of frequent violations of high interest to collect storage, must be banned.But from investor point of view, mean to be deceived however not necessarily and loss.To sum up, structured deposit can hardly be classified as simple deposit or financial management, but a structural complex composed of risk-free return (deposit) and risk-free return (financial management) in a certain proportion.Because of the existence of a pre-calculated “safety cushion”, structured deposits can basically break even (except for some structured deposits, the lower limit of expected return is itself negative), and even reach the lower limit of expected return.But the upper limit of the expected return is uncertain and depends on the outcome of the venture capital component.Therefore, before investing in structured deposits, be sure to read the product specification carefully and anticipate the possibility of achieving a maximum return.If you take it for granted that structured deposits are bound to earn capped returns, you may be disappointed at maturity.