Product characteristics
As a new product, compared with previous bank wealth management products, overseas wealth management products on behalf of customers have three characteristics:
First, the capital investment market of overseas wealth management products on behalf of customers is overseas, and the customer funds raised by overseas wealth management business on behalf of customers are mainly invested in overseas financial products, so that investors have the opportunity to participate in the international financial market.
Second, overseas financial products and markets that can be invested by overseas wealth management products on behalf of customers are limited. At present, commercial banks are not allowed to invest in overseas commodity derivatives, hedge funds and securities rated below BBB by internationally recognized rating agencies.
Third, investors can directly invest in RMB. Investors can use free foreign exchange or RMB to buy overseas wealth management products on behalf of customers, and banks can exchange foreign exchange for overseas investment instead of customers.
product classification
According to different investment methods, overseas wealth management products on behalf of customers are divided into the following two categories:
Product type: Banks invest wealth management funds in designated products, which are designed as structured products, and the income can be linked to interest rates, exchange rates, commodity prices, stock indexes, credit, etc.
Fund type: the client's funds are invested in a portfolio, and the bank acts as portfolio manager, which is similar to QDII funds in the current market.
investment risk
Although there are "opportunities" for overseas investment, investors should realize that investing in overseas wealth management products on behalf of customers still needs to face certain investment risks. Investing in such products mainly faces market risk, exchange rate risk and credit risk.
Overseas wealth management products are financial instruments that invest in overseas markets on behalf of customers, and the income of wealth management products is directly related to the market performance of investment products. Therefore, market risk is the main risk of overseas wealth management products on behalf of customers. Due to the wide investment direction of overseas wealth management products on behalf of customers, including bonds, structured products linked to exchange rates, interest rates, stock indexes and other targets, overseas fund products, overseas listed stocks, etc., fluctuations in interest rates, exchange rates and stock prices will have an impact on investment income, and investors' principal will also suffer losses.
In addition, for overseas wealth management products on behalf of customers, the exchange rate risk is also more prominent. When investors buy overseas wealth management products on behalf of customers in RMB, commercial banks will convert RMB funds into foreign currency funds for foreign investment. After the product expires, commercial banks will convert RMB funds into foreign currency funds for foreign investment. After the product expires, the foreign currency funds invested abroad will be converted back into RMB. The rise and fall of RMB and foreign currency exchange rate will have an impact on investors' income, and even cause the loss of principal.
Credit risk is also an important risk of overseas wealth management products on behalf of customers. As we all know, credit risk refers to the possibility that one party can't fulfill its payment promise and cause losses to the other party in the transaction process agreed in the credit relationship. Investors who buy overseas wealth management products on behalf of customers will directly face the credit risk of issuers of overseas investment targets and other related institutions.