What Are Structured Investment Products?

Structured investment products are a combination of traditional deposit business and derivative products. Its investment income is related to the market performance of the linked financial market derivatives or linked assets or the satisfaction of specific conditions. Typical linked instruments include market indexes, stocks , Interest rates, fixed income products, foreign exchange rates, or a combination of several of them.

Structured investment products

Right!

Structured investment products are a combination of traditional deposit business and derivative products. Its investment income is related to the market performance of the linked financial market derivatives or linked assets or the satisfaction of specific conditions. Typical linked instruments include market indexes, stocks , Interest rates, fixed income products, foreign exchange rates, or a combination of several of them.

Structured investment products are not ordinary deposits or time deposits. Only when the investor holds the structured investment product until the expiration date, the entire principal (capital-protected product) or part of the principal (non-guaranteed product) shown in the product terms and conditions will be returned to the investor. The amount of income may be higher or lower than the return that investors get through deposit products (such as ordinary savings or general time deposits), and may even be zero. The amount of investors' income depends to some extent on the performance of the underlying market. Investors should ensure that investors can understand and evaluate the possible consequences of changes in the applicable pegged target, and how this will affect the investor's principal and earnings.

Chinese name

Structured investment products

Definition

Combination of traditional deposit business and derivative products

Features

Liquidity, risk

Main risks

Foreign exchange

What factors should investors consider before subscribing to structured investment products? There are various types of structured investment products. Investors should evaluate whether the structured investment products meet the investor's personal financial situation, investment experience and investment objectives before purchasing. The following may be the main factors that investors need to consider:

1. Liquidity. Consider the liquidity of investor funds, as investors' funds will be locked for a period of time after subscribing to structured investment products. If investors forcibly demand the redemption of the product in advance, it may result in loss of investment income or even principal. Investors should ensure that sufficient deposits have been reserved for emergency needs before subscribing to structured investment products.

2. Risk. Consider whether the investor's risk appetite is suitable for the product you want to subscribe to. The risk of structured investment products is higher than that of general deposit products. Investors should fully understand the risks involved and the risks that investors will face when the worst-case scenario occurs. If the investor is not familiar with the risks of the product, the investor can read the specific product manual and seek help from professional financial managers.

3. Return. Because structured investment products are linked to certain specific financial instruments, such as indices, securities, interest rates, fixed income products, exchange rates, or a combination of these, investors should understand the market performance of the linked financial instruments. Investors intend to subscribe to How will the returns on your structured investment products affect. Investors should note that the past performance of a product is not indicative of its future performance.

4. Terms and conditions. Before making any subscription, investors should read the terms and conditions of the product and other relevant documents carefully. If investors do not understand how the product works, investors can seek explanations. Don't make a rush decision while still having questions about the product.

In view of the fact that the above factors have not been exhausted, and the bank cannot provide investors with any suggestions or explanations on whether the product is suitable for the investor's condition, investors should seek independent financial advice and professional advice.

1. Liquidity risk-Early redemption is not allowed. The investor will promise a fixed investment term under this investment product, and will only pay the principal and income (if any) to the investor when the investment product expires. Investors may not redeem it in advance of the expiration date unless the bank agrees in writing. The consent given by the bank is based on its absolute discretion and is subject to conditions it considers appropriate. These conditions may result in loss of investors' income or principal amount. Therefore, investors may suffer a significant loss of principal amount due to early redemption or early termination of investment products.

2. Foreign exchange risk. If the investor is engaged in daily operations in a currency other than the investment currency or is used as the bookkeeping base currency, the investor should note that the investor uses the amount of income (if any) and the principal amount obtained from the investment product Previously, investors might first need to convert these payments into the appropriate currency. Exchange rate fluctuations will also affect the conversion, and investors may consider choosing the appropriate hedging tools or other means existing in the market to protect the interests of investors.

3. Yield risk. Depending on the performance of the underlying target, investors may not receive returns, or the returns may be lower than the returns on ordinary savings deposits or ordinary time deposits in the market during the same period.

4. Bank credit risk. Throughout the investment period, investors will also face the credit risk of the issuing banks of structured investment products.