Analysis of foreign exchange wealth management products Foreign exchange wealth management products refer to the currency when the individual purchases wealth management products is only for the freely convertible currency, and the income is also calculated in foreign currency. Foreign exchange wealth management products purchased through banks do not require investors to make judgments on investment decisions, but are completely guided by the pre-designed terms of the products and the bank's professional investors. Mainly divided into two categories, namely fixed-income foreign exchange wealth management products and foreign exchange structured wealth management products. (1) Fixed-income products Fixed-income foreign exchange wealth management products are mainly linked to the underlying assets or investment direction of foreign exchange bonds. Under the same period of time, their income is higher than the foreign exchange deposit income of the same currency, and the risk of loss is almost No. However, affected by the financial crisis, central banks have cut interest rates, resulting in a shrinking income space for fixed-income foreign exchange wealth management products. Many banks have stopped selling fixed-income foreign exchange wealth management products, mostly based on short-term products. The level is lower. Therefore, investors can convert into foreign exchange at a higher interest rate level on the premise of fully considering the exchange rate risk. They can choose to purchase fixed-income wealth management products or simply preserve the value in the form of bank deposits. In addition, since fixed-income foreign exchange wealth management products generally do not allow early redemption, investors must fully consider the liquidity risk of assets. In the period of sharp fluctuations in exchange rates, you can choose short-term wealth management products to prevent risks. (II) Structured products The investment scope and linked derivatives of foreign exchange structured wealth management products are relatively extensive, and can be linked to commodities, overseas stock prices or indices, hedge funds and gold oil. It can be divided into static and dynamic. Static means that the design structure will not change after the product is released; dynamic will make corresponding investment adjustments for the field situation. At present, the structural product will set a minimum guaranteed amount, and the floating income on the principal amount depends on the performance of the product-linked target. Compared with fixed-income products, structural products have high risk of return, high returns or zero returns, and even negative returns are possible. Moreover, the design of bank's structured foreign exchange wealth management products is becoming more and more complicated, and it is difficult for ordinary investors to understand the terms of product design and the possible investment risks. Although the terms of the capital preservation clause ensure that investors are not exposed to the risk of a significant reduction in the principal, investment in structured foreign exchange wealth management products must consider the following risks. 1. Revenue risk Structured foreign exchange wealth management products are operated across the market, and their investment targets are linked to international interest rates, exchange rates, stock prices or indices, and commodity prices such as gold. Banks generally will determine the level of return due to the actual performance (observation) of the target, unilaterally linked, and bilaterally linked. The unilateral hook is to obtain the income only when the price of the linked investment target is all up or down, and the bilateral linkage is linked to the absolute value of the price fluctuation. The maximum value, the minimum value or the weighted average can be taken to determine the observation value. . In addition, the bank sometimes pre-sets a fluctuation interval, whether it is unilateral or bilateral, when the actual observation falls within or exceeds this interval, the investor can obtain the income. In this way, it is still difficult to obtain the expected benefits of any structured wealth management product. For example, a bank's wealth management products linked to H-share red chips will increase the price of the three stocks by 110% at the end of the period to obtain a 23% yield to maturity, otherwise the actual yield will be only 3%. Another example is a Hang Seng Bank's foreign exchange wealth management product linked to the Hang Seng Index. As the index during the observation period exceeds the bank-defined fluctuation range, the final investment income is zero. Relatively speaking, the risk of taking a two-way hook is less than the one-way hook. Since the yield of the two-way linked product is only related to the absolute value of the price of the linked asset, it has nothing to do with the actual direction of the fluctuation. During the observation period, as long as the price If there is volatility, you can get income regardless of the ups and downs. For example, Citibank is a rising-and-loss, win-win structured product linked to five Hong Kong stocks. The average of the minimum volatility of the five stocks during the observation period determines the investor's maturity gains, as long as the stocks fluctuate during the observation period. Certainly you can get the benefits. 2. Redemption risk Some foreign exchange wealth management products banks have the right to terminate the contract, and banks often choose to terminate the contract at a time that is unfavorable to them, and this is precisely when investors get high returns. At present, there are two main forms for banks to set the early termination right: First, the bank can terminate the product in advance when paying the proceeds, and the customer has no right to terminate the product agreement in advance. If you want to terminate the product agreement in advance, you need to pay a certain penalty: Second, according to the amount of the customer's investment products, the customer has the right to redeem in advance. 3. Liquidity risk Since most foreign exchange wealth management products do not allow investors to terminate contracts in advance, they must hold maturity. Therefore, if financial difficulties arise during the investment period, investors will have difficulty in cash flow. In addition, due to liquidity restrictions, if the interest rate of the holding period continues to rise, and the yield of wealth management products rises at different times, the actual income level of the product will also fall. 4. Risk of Information Disclosure Investors often ignore the terms and conditions of foreign exchange wealth management products, or believe in the explanation of bank sales personnel due to professional disclosure of the terms. The proceeds of many foreign exchange wealth management products that are advertised at the time of sale are the total income for a certain period of time. The total income is different from the annualized income, and the bank has the right to terminate the contract in advance, and the investor may not get the expected return. In addition, although the bank will disclose the most unfavorable income situation or no guaranteed income in the product description, investors are often confused by the expected high yield. In particular, information disclosure on the principal terms involves who pays the principal income and whether there are other conditions attached to the principal. If the principal and the payer of the proceeds are trust companies after the expiration, this will increase the risk once the trust company Bankruptcy, not to mention investment income, even the principal is difficult to protect. In addition, some foreign exchange structured products are complicated in design. Investors simply cannot check the relevant investment targets and other relevant information through the terms and conditions of the wealth management product manual, resulting in investors only relying onThe product statement on the regular basis of the bank's investment knows the actual investment income of the product, which affects the investor's investment decision. 5. Exchange rate-linked risks These risks are mainly related to exchange rate-linked foreign exchange wealth management products. Although these products can bring greater benefits to customers, if you judge the fluctuation of the exchange rate, not only will your own income decline, but also the loss of currency depreciation. In particular, some foreign exchange wealth management products linked to the currency exchange rate of small currencies are even more difficult for ordinary investors to judge their accurate trend, and the risk of exchange rate fluctuations is greater. For example, Bank of Communications is a foreign exchange wealth management product linked to three basket currencies, respectively, with the American currency basket (Brazil Lille, Argentine peso, Mexican peso), Asian basket currency (Indonesian rupiah, Indian rupee, Philippine peso), European basket currency ( Turkish Lira, Polish Zloty, Russian Ruble) The maximum rate of exchange rate performance for the US, Japan and Europe during the observation period to determine the yield to maturity. Since these currencies are non-primary foreign exchange currencies, it is difficult for investors to make expectations, and the risk of zero returns is high. In addition, if the currency of the foreign exchange wealth management product is selected, the foreign exchange currency must be considered. The risk of exchange rate fluctuation of the relative currency during the holding period must also be considered. Since there is no forward foreign exchange product for the currency exchange rate, ordinary investors cannot hedge the currency exchange rate risk. Therefore, investors can exchange coins or choose currency-priced foreign exchange wealth management products.