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Structured financial management: 2023 will welcome the "big year" of issuance, but the scale of single product fundraising will decrease quarter by quarter

author:21st Century Asset Management Research Institute
Structured financial management: 2023 will welcome the "big year" of issuance, but the scale of single product fundraising will decrease quarter by quarter

来源 | 21世纪经济报道作者 | 南财理财通编辑 | 唐曜华新媒体编辑 | 实习生蔡怡楠

In the context of declining interest rates, severe equity market volatility and intensifying "asset shortage", the importance of derivatives in the capital allocation of wealth management products has become more and more prominent. According to the data of the banking wealth management registration and custody center, the scale of commodity and financial derivatives wealth management at the end of 2023 will be 40 billion yuan, an increase of 100% from the end of 2022. According to data from Nancai Wealth Management, the number of new structured wealth management issuances by wealth management companies will increase significantly in 2023, an increase of nearly 110% compared with 2022. Among them, the new issuance of fixed income structured wealth management increased by 234.92% year-on-year. Structured wealth management is issued by wealth management companies or banks, and the income is usually related to the linked index, commodity, and fund. Compared with structured deposits, they all have the attributes of income enhancement. The structured wealth management products in this article are those with embedded derivatives structures as stated in the prospectus of wealth management products. To a certain extent, structured wealth management is similar to structured deposits and principal-protected brokerage income certificates. In terms of actual operation, the scale of structured wealth management will overlap with the income certificate of the principal-guaranteed brokerage. Wealth management companies generally need derivatives trading qualifications to issue structured wealth management, but not all wealth management companies have this license, and wealth management companies without a license or structured wealth management with a raised amount of less than 50 million yuan can indirectly participate in derivatives market investment through the allocation of brokerage income certificates. According to Nancai Wealth Management, as of the end of 2023, only 16 wealth management companies have derivatives trading licenses. Income certificates refer to securities issued by securities companies and sold to qualified investors in the form of private placements, and the repayment of principal and income is agreed to be related to a specific target. Income certificates are usually associated with specific underlying assets, including indices, futures, interest rates, exchange rates, financial derivatives and underlying commodities. According to the contract, it is divided into "principal protection type" and "non-principal protection type". In the principal-protected income certificate, the securities company uses the funds raised to carry out a structured product design, agree on the term structure, and repay the principal and interest when it matures or reaches the agreed target. In addition, the development of structured financial management is also inseparable from the pressure drop of structured deposits. Structured deposits are deposits embedded in financial derivatives absorbed by commercial banks, which are linked to the performance of interest rates, exchange rates, indices and other targets or to the credit status of an entity, so that depositors can obtain corresponding returns on the basis of assuming certain risks. Structured deposits are favored by listed companies due to their low risk, but the long-term downward trend of structured deposits may be difficult to change. Due to the characteristics of capital protection of structured deposits and principal-protected brokerage income certificates, listed companies prefer structured deposits and brokerage income certificates in combination with the security and profitability of investment. Structured deposits are also included in the scope of deposit insurance, which is not available in structured wealth management products, and wealth management products have basically achieved net worth, and the net value of products changes with the value fluctuation of the investment target; in terms of income, all three have a certain probability of obtaining a higher level of income. In recent years, in order to support the real economy and crack down on capital idling arbitrage, the regulator has strengthened the regulation of structural deposits, and the general direction of reducing structural deposits remains unchanged. The size of structured deposits has been on a downward trend on a monthly basis since April 2020. According to Flush data, as of the end of 2023, the balance of RMB structural deposits of Chinese national banks was 4.02 trillion yuan, down 66.89% from the high of 12.1 trillion yuan at the end of April 2020, down more than 8.1 trillion yuan. The ability of structured financial management channels to absorb funds has weakened. Looking back on the amount raised, the amount raised in the 2023 "fixed income + option" structured wealth management quarter will increase first and then decrease. As a whole, it showed a situation of crazy gold absorption in the first half of the year and difficulty in raising funds in the second half of the year, and the amount of single product raised decreased quarter by quarter. From 313 million yuan in the first quarter of 2023 to 127 million yuan in the fourth quarter of 2023, a decrease of 59.42% in comparison. The research team of Nancai Wealth Management has learned that compared with product structure innovation, it is more effective to open up channels, especially head channels, to improve the scale of product fundraising. In the second half of 2023, it will be difficult to raise structured wealth management products, and it will be difficult for various wealth management companies to share the scale of structured products in the top channel scheduling, making it difficult to place large orders. In the fourth quarter of 2023, even the fundraising capacity of the head channel is slightly weak, with the initial fundraising scale of many products being less than 50 million, and the initial fundraising scale of some products even less than 10 million, which is less than the lower limit of the fundraising scale of the product brochure but still holds.

Structured financial management: 2023 will welcome the "big year" of issuance, but the scale of single product fundraising will decrease quarter by quarter

According to the data of Nancai Wealth Management, the average annualized return to maturity of structured public wealth management due in 2023 is 2.58% (consolidated registration code, the same below), of which the average annualized return to maturity of fixed income structured wealth management is 2.76%, and the average annualized return of hybrid structured wealth management is 2.16%. From the perspective of existing products, as of the end of 2023, the average net value of structured public wealth management with a duration of one year will increase by 3.03% in 2023, of which the average net value of fixed income products (fixed income + options) will increase by 3.23%, and the average net value of mixed products will increase by 2.41%. In 2023, the average net value growth rate of fixed income structured wealth management products will be lower than that of pure fixed income (3.61%), but higher than that of fixed income + equity (2.89%). It is worth noting that the operation mode of structured wealth management with a duration of one year is mostly open-ended, while closed-end structured wealth management accounts for the mainstream of newly issued products. In the first half of 2023, the main index attracted more investors at a relatively high point, so the issuance volume was larger, and the main index performed poorly in the second half of the year. In the explanation, the inline structure is the mainstream practice of structured wealth management products in the current market, and only a few products disclose the performance benchmark in the product brochure but do not indicate the structure used, and only disclose the purchased income voucher in the actual operation report. The investment manager of the product that does not disclose the specific structure and the underlying product has more room to operate, and can adjust one or more embedded structures that are suitable according to market conditions. However, from the perspective of investor protection, clients want transparent information about structured products, which can help them better understand product risks and match their own risk appetite. The sales channel usually sells structured products that do not specify the structure and other information, mainly as "fixed income +" products or hybrid multi-asset allocation products. In the long run, structured wealth management issuance mainly relies on the brand series effect created by past performance, and behind it is the strength of the structured product investment and research team of wealth management companies. The strength is mainly divided into two parts: first, product innovation ability and design ability. In 2023, 14 wealth management companies will launch structured wealth management at the same time, and the products embedded with "binary call automatic knock-out" are emerging in an endless stream, and wealth management customers are more likely to accept binary structured products after the baptism of similar product structured deposits, and the product performance benchmark is easier to understand. However, with the increase of entrants, product competition tends to be white-hot, the flexibility of the binary structure is limited, and the construction and application of a structure that is more suitable for the market seems to be one of the breakthrough directions, such as the innovation of the structure of the snowball of capital protection. Second, the ability to grasp the market keenly. Investors mainly rely on the brand effect of wealth management companies and the past historical performance of this series of products. The market is suitable for different option portfolios in different periods, and the timing and structure of structured wealth management issuance test the issuer's grasp of the market. In recent years, with the continuous decline of deposit interest rates, the relative cost performance of wealth management products has improved. The scale of structured wealth management is still small, but with the decline of assets such as structured deposits, the future prospects are broad.

For the full text of the report, please contact the research group at the end of the article.

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Structured financial management: 2023 will welcome the "big year" of issuance, but the scale of single product fundraising will decrease quarter by quarter

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