Over 1,000 bank wealth management products "broken" are you panic?


A number of wealth management companies have analyzed that short-term fluctuations in the net value of products do not mean substantial losses in investments

  "It's said that the risk of bank wealth management is low, so why do you lose money?" "I didn't expect bank wealth management to have negative returns. I've seen it for a long time." Recently, many investors have found that the net value of the bank wealth management products they bought has retreated, and the book value has been reversed. There are already losses.

Wind data shows that as of March 17, among the 28,821 bank wealth management products in the whole market (including those issued by banks and bank wealth management subsidiaries), there were 2,036 net-breaking products, of which 2,342 products still had a cumulative net value equal to " 1", touches the clean edge.

  In order to ease investors' anxiety, a number of wealth management companies such as Bank of Communications Wealth Management and CMB Wealth Management have issued documents to popularize the financial knowledge of the net worth of wealth management products to investors, and analyze the reasons for the recent decline in net worth.

They said that the recent poor performance of bank wealth management products is mainly affected by the volatility of the bond market, but the short-term fluctuation of the net value of the product does not mean that the investment has suffered substantial losses. The final loss or profit of the product will only be truly revealed when it expires. It is recommended to invest Don't dwell on short-term net worth fluctuations.

  Why bank wealth management products

  Will it be net worth?

  Bank of Communications Wealth Management said that in the early stage when the wealth management product market was immature, many financial institutions, in order to increase customer stickiness and maintain their own brands, often lost money or failed to reach the expected rate of return. The rate of return is given to investors to redeem.

  In this way, risks arising from some products may accumulate in the financial system.

  When the market rate of return rises as a whole, the expected rate of return can only lock in fixed income, which increases the opportunity cost, and the increased income becomes the income of the asset management institution.

When the market rate of return declines, if the expected rate of return is still paid to investors, it will force institutions to allocate higher risk assets, increasing the volatility and risk of products.

  In 2018, the regulatory authorities issued new regulations on asset management, and wealth management products ushered in an era of net worth transformation.

  Bank wealth management products after netting

  Changes in two ways

  According to reports, after the net worth, bank wealth management products have undergone major changes in two aspects.

The first is a change in valuation methodology.

Before the new regulations on asset management, the valuation of bond assets by wealth management products mostly adopted the amortized cost method.

The amortized cost method means that when calculating the net value of a wealth management product, the yield to maturity of the investment product is amortized to each day for calculation.

  Suppose a wealth management product buys 1-year treasury bonds with a 2.1% interest rate for 100 yuan, the wealth management product amortizes the 2.1% to each day, that is, 2.1%/365, and then multiplied by the purchased amount is this The daily return for the bond.

  At the same time, the premium or discount of investment products can be spread evenly to each valuation day, then the net value and yield of the product can be artificially "adjusted" to a smooth state, and all fluctuations are hidden in the straight line rising at a constant speed, making the net worth look at It looks very neat.

  After the new asset management regulations, most wealth management products are valued using the market value method, which not only considers the coupon rate of investment bonds.

Changes in the valuation of bonds due to market value fluctuations are also considered.

  For example, a wealth management product that is only valued by the market value method still buys 1-year government bonds with a 2.1% interest rate for 100 yuan. When valuing, the wealth management product will first calculate the nominal return of 2.1% to the daily rate. In the income, that is 2.1%/365 days, it should also reflect the difference between the purchase price of the bond and the market price of the day.

  In this way, fluctuations in asset prices will be directly reflected in the net value of wealth management products.

  At the same time, the method of net worth disclosure of bank wealth management products has also changed.

In the early stage of the development of wealth management business, when investors purchase wealth management products, the market value of the product shows the purchase amount, and the net value of the product will not change; the principal and corresponding income will not be credited to the investor's account until the product expires.

Now, according to regulatory requirements, asset management institutions are required to disclose the net value of products on a regular basis and in a timely manner, and investors can see fluctuations in the net value of products.

  bond market turmoil

  The recent retracement of the NAV of wealth management products

  Why are the returns of so many bank wealth management products negative recently?

CMB Wealth Management said that the assets invested in general wealth management products are very stable, and will invest in various deposits, bonds and various non-standardized assets; products with higher risks (R3-R5) may also be allocated a small amount of stocks, Equity products such as funds.

By understanding the underlying assets invested in the product and paying attention to the relevant market conditions, you can basically understand the reasons for the rise and fall of returns.

Recently, the overall bond market has experienced relatively obvious fluctuations, resulting in the temporary poor performance of the net worth of some net worth products with a large proportion of bonds.

  Bank of Communications Wealth Management also pointed out that in 2022, the bond market experienced a rapid decline after the Spring Festival.

With the rise of geopolitical risks, the haze of local wars has enveloped the world, the global equity market has experienced continuous declines, and the net value of many products has fluctuated.

  Product equity drawdown

  does not imply a substantial loss

  Bank of Communications Wealth Management also emphasized that the periodic withdrawal of the net value of the product and the substantial loss when the product expires are not the same thing.

Because the market is constantly changing, floating profits and losses are the normal state of investment, and risk and return go hand in hand.

Drawdowns and gains are also twin brothers.

When the purchased financial products have long-term and stable profitability, the temporary floating profit and loss is only a stage in the whole curve.

If investors hold long-term net worth wealth management products, short-term corrections may bring certain psychological shocks, but whether the net worth of the product is a positive return will only be truly revealed when it expires.

  It should be pointed out that the main investment direction of most bank wealth management products is the bond market, and the allocation of assets in the equity market is less, just like the proportion of honey in a glass of water, which increases the income and drawdown of bank wealth management products. Amplitude has played a role in adjustment.

Although the new asset management regulations have opened a new stage of net worth of bank wealth management products, the stable operation style and risk management and control capabilities of bank wealth management subsidiaries will not undergo substantial changes as a result.

The market stage pullback does not affect the configuration value of the long-term investment logic.

Investors should not be entangled in short-term fluctuations in net worth. They may wish to broaden their investment horizons and use wealth management products with professional investment and research capabilities to capture good market opportunities.

  "The short-term ups and downs of income are only temporary performance. Don't worry too much about the fluctuation of net worth in one or a few days. In the medium and long term, institutions are still optimistic about the bond market. It is recommended to lengthen the investment time line and exchange time for space. , and gain income." CMB Financial Management also advises investors.

  Text / reporter Cheng Jie