Fixed-income trust products refer to trust products with fixed yield and term issued by trust companies. The financing party raises funds from investors through the trust company, and guarantees to return the principal and income when due by mortgaging (pledging) the assets (equity) to the trust company and the third party.
Do fixed-income trusts really protect capital and income?
Any investment is risky, and fixed-income trusts do not promise to protect capital and guarantee income. Fixed-income trust products have strict and effective risk prevention mechanism, which minimizes investment risks through asset mortgage, equity pledge, guarantee company and individual joint liability guarantee.
What are the categories of fixed income trust products?
Generally speaking, fixed income trust products are divided into loans, equity investments, equity investments, portfolio investments and others.
Loan trust: completed by issuing loans to financing enterprises.
Equity investment trust: investing in equity, holding part or all of the equity of the company through equity transfer and capital increase to the company.
Equity investment trust: the trust company obtains specific rights (generally equity or creditor's rights) and related subordinate rights, and the trustee realizes the value-added of the trust plan property after holding the target rights and paying off in accordance with relevant agreements.
Securities investment trust: a collective fund trust that invests in a single or multiple projects. Investment methods include but are not limited to loans, equity investment, equity investment, etc.
What areas do fixed income trusts mainly invest in?
General investment in infrastructure, real estate, industrial and commercial enterprises and so on. Securities investment trusts will also invest in low-risk bond markets and money markets.
What is a trustee?
Refers to the trust company that issues trust products.
What is a guarantor?
When the trustee invests the trust funds in a project, he needs a third party to ensure the return of the investment and bear joint liability for the project. The third party is the guarantor. Generally speaking, the guarantor can be a company, a natural person, the parent company of the project sponsor, the actual controller, a special third-party guarantee institution, and so on.
What is mortgage and pledge?
When the guarantor guarantees the investment project, it will mortgage and pledge its equity and creditor's rights to the trustee. The realized value of collateral must be greater than the trustee's investment amount and expected income. If the investment project fails, the trustee can realize mortgage and pledge to ensure the income.
What is the investment threshold of fixed income trust products?
The purchase threshold of fixed-income trusts is similar to Sunshine Private Equity, which is only issued to qualified institutions and individual investors, and is not publicly sold or publicized. At the same time, the initial investment amount is relatively high, each investment is generally not less than 654.38+0 million, and the number of investors with a single trust of less than 3 million is limited to 50 places.
What are the fees for purchasing fixed-income trust products?
At the investor level, fixed-income trust products generally have no subscription fees and fixed management fees. The actual income of fixed income trust may exceed the expected income in operation, and the trust company only regards the excess as floating management fee, which does not affect the income of investors.
What is the liquidity of fixed income trusts?
According to the Administrative Measures for Collective Fund Trust Plans of Trust Companies, the term of collective trust established by trust companies shall not be less than 65,438+0 years, but there is no such restriction for single-category projects. At present, the term of trust products on the market is
Most of them are in 1-3 years. It is more suitable for investment and wealth management customers who expect to obtain stable income through medium and long-term investment. The Fixed Income Trust Contract stipulates that the trust cannot be redeemed during its existence, but can only be redeemed during its existence.
Obtain trust principal and income after maturity. Income distribution and withdrawal of fixed income trust products
Fixed-income trust products have no net value during the duration of the trust. Generally speaking, at the end of each trust year, the income earned by the trust will be directly distributed to investors in cash after deducting relevant taxes and fees. The undistributed income and trust principal of the trust will be distributed to investors after all investment projects have successfully obtained income or the duration of the trust expires.
Who does the investor sign the trust contract with?
No matter through what channels, trust products are ultimately signed with trust companies.
What is the difference between fixed income trust and bank wealth management products?
There are some differences between bank wealth management products and fixed income trusts in terms of initial amount, product term and expected income.
Bank wealth management products fixed income trust products
Issuer bank trust company
The investment threshold is 1 10,000/200,000/500,000, ranging from 1 10,000 to 3 million.
The product life is 7 days ~ 1 year (or above), and the range is 1 year /2 years /3 years or above.
The expected return is about 2%-5%, 6%- 10%.
Who will supervise the fixed income trust products?
Fixed-income trust products such as Sunshine Private Equity Fund are initiated by trust companies and filed with CBRC. Trust companies are supervised by the China Banking Regulatory Commission, and private fund companies are supervised by trust companies and the China Banking Regulatory Commission.
How should senior investors choose fixed-income trust products?
Investors can choose fixed-income trust products from the following angles.
(1) Trust company: First, examine the comprehensive strength of the trust company. At present, there are 62 trust companies in China, and each company has different management level, risk control ability, profitability and management fund scale.
(2) Investment industry: Industries with high industry prosperity have more investment value.
(3) Guarantor: It depends on the background of the guarantor, the net assets and composition of the guarantor, the relationship between the guarantor and the financier, and the responsibilities undertaken by the guarantor.
(4) Strength of the financier: Understand the financial status, growth prospects and industry and company background of the financier.
(5) Source of income: It is necessary to know the reliability of expected income, that is, the feasibility of the success of the project.
(6) Product term: Generally, between the purchase of trust products and the payment of principal and interest by the financier, investors' funds cannot be redeemed, so investors should be optimistic about the product term in order to arrange future cash flow. In addition, some products are terminated or postponed in advance. Investors are also requested to pay attention to whether there are such additional clauses before signing the contract.
(7) Mortgage rate: Mortgage rate refers to the value of the funds to be financed relative to the mortgaged property. The lower the mortgage rate, the smaller the project risk and the safer the project. At the same time, it also depends on the realization of the mortgaged property.
(8) Expected annualized rate of return: Other things being equal, the higher the expected annualized rate of return, the better.
Investment risk of fixed income trust
Trust companies have strict and effective risk prevention mechanisms, and design effective risk avoidance schemes for each trust plan to minimize trust investment risks. However, fixed-income trust products do not guarantee principal and interest. Investment risks include: credit risk, liquidity risk and interest rate risk.
Credit risk: the financing party may have operational problems and cannot repay the due interest on time. Trust companies protect investors' income as much as possible through mortgage, pledge, guarantee and compulsory notarization.
Liquidity risk: Most fixed-income products cannot be redeemed before the opening period. Even if they can be withdrawn in advance, they will have to pay a certain price, such as handling fees.
Interest rate risk: the expected income of fixed-income trust has been fixed at the time of issuance, and will not change with the change of interest rate unless otherwise agreed in the trust contract; When the interest rate increases, the relative excess return of fixed income trust decreases with the increase of risk-free rate of return.
What are the risk control measures of trust companies?
Mortgage, pledge, guarantee, compulsory notarization, etc. The trust company will require the financier to pledge or mortgage the company's assets or equity to the trust company, so as to protect the investors' income, and at the same time require the relevant company or the person in charge of the company to assume the guarantee responsibility, and make compulsory notarization of the loan contract, pledge contract and guarantee contract. Several risk control methods are the guarantee of investors' future income.
Information disclosure mechanism of fixed income trust
Fixed-income trusts will disclose the trust operation to investors every trust quarter, including the direction of fund operation projects, project progress, financial status of the project company, acquisition of collateral, realized income and distribution, etc.