What is structured finance?

Today we will talk about it briefly, please see below.

What is structured finance?

The funds of structured financial management are divided into two parts. One part is invested in basic financial instruments, such as deposits, bonds, and monetary funds. This part of the investment risk is very small; the other part of the funds is invested in financial derivatives, such as options, futures, and exchange rates. This part of the investment

The stakes are high.

Are the high expected returns of structured financial management reliable?

Take China Merchants Bank's "CSI 300 Bullish Shark" as an example. This product has a floating expected return, with a maximum of 14.34% and a minimum of 1.84%. The reason why it has such a large span is because of its investment direction.

90% of the funds in this product are invested in fixed income assets, such as deposits, bond reverse repurchases, etc.

There are also 10% of call options invested in the CSI 300 Index. If you want to obtain the highest expected return of 14.34%, the following conditions must be met: During the 2-month observation period, assuming that the CSI 300 Index was 3,000 points at the beginning, then the observation

During the period, the CSI 300 Index shall not exceed 3,300 points, and after the observation period, the CSI 300 Index shall not fall below 3,300 points.

From this condition, we can see that it is very, very difficult for structured financial management to get the highest expected return. The reason why banks set a high expected return is, in the final analysis, just a publicity stunt to attract novices who don’t know anything.

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Moreover, not only is the expected return of structured financial management unreliable, but the principal is not guaranteed, so everyone should be careful about this.

Okay, that’s it for introducing structured financial management. I hope it will be helpful to everyone.