Bank wealth management "nuggets" are hot, can investors still get on the bus?

Recently, the price of gold has soared, and banks and wealth management subsidiaries have launched products containing "gold".

The reporter of "International Financial News" noticed that CMB Wealth Management, Everbright Wealth Management, IB Wealth Management and other institutions have recently launched bank wealth management products linked to gold, and Ping An Bank, China Merchants Bank and other structured deposit products containing "gold" are on sale.

Experts suggest that we should guard against the risk of a high correction in gold prices and the risk of product design, and make prudent decisions according to our own risk tolerance and investment goals.

The amount of "gold" in the product is increased

Entering 2024, gold prices have been rising, and since March, they have often broken historical records, and gold has also become the object of eager pursuit by investors.

Recently, the "gold" content of the products of banks and their wealth management subsidiaries has also increased.

From the perspective of product types, many wealth management subsidiaries choose to launch fixed income products with low risk levels, with a certain share of gold investment.

On 9 April, Everbright Wealth Management's "Sunshine Green Leap Joy 12 (Gold Auto-Trigger Strategy) Fixed Income A" product entered the fundraising period. According to the product information, the product is linked to SGE (Shanghai Gold Exchange) Gold 9999 (AU9999.SGE) binary call automatic call structure OTC option, with a low risk level.

CMB Wealth Management is also optimistic about the trend of gold, and on the same day, it began to raise multiple shares of "Zhaorui Focus Linkage Stable Gold Bullish Binary No. 3", mainly investing in fixed income assets and over-the-counter derivatives such as options linked to SGE Gold 9999, with a risk rating of PR2 (medium and low risk).

IB Wealth Management has also launched two types of shares of "Ruili Xingcheng Jinchen No. 1", and the investment ratio of gold assets fluctuates between 5% and 10%.

Structured deposits with "gold" are also popular. "Linked to gold, enhance potential returns", Ping An Bank has launched four structured deposits in one go, including "Step by Step Profit" and "Quarterly Wisdom Win", and China Merchants Bank has also launched a number of gold-linked structured deposits with a cycle of 1-3 months.

Why are banks and wealth management subsidiaries launching gold-linked products?

Sun Enxiang, head of the partner team of Paipai.com Wealth, told reporters that on the one hand, the layout of gold assets by bank wealth management subsidiaries is easier to attract the attention and purchase enthusiasm of investors. On the other hand, gold has safe-haven attributes, and in the context of escalating geopolitical conflicts and increasing global economic uncertainty, the market is heating up risk-averse, and the demand for gold allocation will also increase.

The reporter noted that most of the upper limits of the performance comparison benchmarks of the above financial products containing "gold" are in the range of 3%-5%. Previously, the "Seeking to Win No. 1" launched by Beijing Bank Wealth Management had a performance benchmark range of up to 6.7%. In terms of actual returns, CMB Wealth Management launched the "Target Profit and Stability Gold 24 Month Closed No. 1" product at the end of last year, with an annualized rate of return of 6.81% since its establishment.

"Gold-linked wealth management products are usually allocated fixed income assets and gold-like assets, which have the opportunity to obtain additional income from rising gold prices while obtaining relatively stable income, and its advantage is that it can obtain potential value-added opportunities while diversifying risks. Sun Enxiang pointed out, "but its disadvantage is also that the income is related to the fluctuation of gold prices, the current gold price is already in a high position, once the downward fluctuation, may have a greater impact on the income of wealth management products." ”

How to prevent and control risks

Not long ago, the news that "the price of jewelry gold broke 700 yuan per gram" rushed to the hot search on Weibo. "I used to think that gold jewelry was rustic, but now I regret it!" said a netizen.

On April 11, data from the Shanghai Gold Exchange showed that the opening price of Shanghai gold was 555.01 yuan per gram on that day, while the price of a single gram in early March was still floating around 480 yuan, an increase of more than 70 yuan per gram in just over a month.

Now that the price of gold is already at a high level, is it still a good time for investors to get their hands on?

"Judging from the trend, the gold price has shown a rising trend recently. Although there is still some room for growth in the follow-up market, it is still not recommended that investors blindly buy financial products linked to gold. Liu Yan, chairman of Anjue Assets, said, "It should be noted that the current gold price is already at a high level, and there is a certain risk of a correction." ”

Sun Enxiang also pointed out that in the long run, gold may still have performance opportunities under the deep background of deepening geopolitical crisis, serious over-issuance of the US dollar, the peak of the US dollar interest rate hike cycle, and the change of the US dollar's credit currency status. But in the short term, driven by hot money in the market, gold speculation is overheated, and a short-term surge may overdraft future gains.

"Although gold-linked wealth management products have certain income potential, they are not without risk. Investors should fully understand the features and risks of the product before purchasing, including the linkage mechanism, return calculation method, redemption conditions, etc. At the same time, it is also necessary to evaluate the credibility and strength of financial institutions and choose reliable investment channels. Liu Yan advised, "Investors must first pay attention to the overall market volatility risk. The price of gold market is affected by various factors such as global economic, political and monetary policies, and fluctuates greatly. In addition, gold-linked wealth management products are usually related to a specific gold price range or trend, and there may be product design risks, investors should carefully read the detailed instructions of the products they purchase to understand the key information such as the product's linkage mechanism and income calculation method. Finally, don't be fooled by overly high expected returns, and make sure to make decisions based on your risk tolerance and investment goals. ”

For banks and wealth management institutions, how to control risks when managing related products under the gold investment boom?

In Sun Enxiang's view, on the one hand, wealth management subsidiaries should continue to do a good job in investor education, so that investors have a full understanding of the characteristics and potential risks of such wealth management products, and at the same time ensure that investors' risk tolerance and product risk level match. On the other hand, from the perspective of professional investors, it is necessary to continuously track and analyze the price trend of gold, so as to adjust the gold asset allocation ratio of wealth management products in a timely manner.

"When managing related products, bank wealth management subsidiaries should establish a sound risk assessment, risk control and risk monitoring mechanism to ensure that the risk level of the product is within a controllable range. It is particularly important for institutions to strengthen the information disclosure and transparency of the product, and timely disclose important information such as the product's investment portfolio, holdings, and income performance to investors to ensure that investors can fully understand the operation of the product. Liu Yan suggested.