Financial knowledge: What is a fixed income product? What are the types of fixed income products available?

Fixed income usually refers to the income obtained by investors at a predetermined interest rate, such as bonds and certificates of deposit, where investors can receive the agreed interest upon maturity. However, after the introduction of new asset management regulations, the implicit practice of fixed income products was broken, and related wealth management products began to transition from fixed income to net worth, known as quasi fixed income wealth management products. Although it is no longer possible to guarantee rigid redemption, compared to other assets, the risk of fixed income products is still relatively low, and they have gained the favor of many risk averse individuals in the turbulent market.

So, what are the types of fixed income products available?The most familiar thing for everyone is probably bank deposits. In addition, common fixed income products such as bonds, bond funds, monetary funds, trust products, etc. Today, I will introduce what is a type of fixed income product? What are the types of fixed income products available?

Bank deposits

As an entry-level wealth management product, bank deposits are also the most basic fixed income wealth management products, with high safety and relatively low returns, mainly including demand deposits, time deposits, large certificates of deposit, interbank certificates of deposit, etc. From the perspective of the nature of wealth management products, whether it is a large certificate of deposit or a regular time deposit, both belong to the category of deposits, and are protected by the Deposit Insurance Regulations.

The biggest difference between large deposit certificates and regular time deposits lies in the difference in their minimum deposit amount and yield. The minimum deposit amount for large deposit certificates is20Ten thousand yuan, the minimum deposit amount for regular time deposits is50Yuan. In recent years, the one-year deposit interest rate of banks has dropped again and again, and currently it is1.5%The issuance interest rate of large certificates of deposit is generally higher than the benchmark interest rate40%The one-year coupon rate is2.1%。

Bonds

In the fixed income market, bonds are also relatively typical fixed income financial products, with issuers paying interest on schedule and repaying principal when due. China has a rich variety of bonds, which can be divided into treasury bond, local government bonds, financial bonds, short-term financing bonds, medium-term notes, corporate bonds, corporate bonds, etc. At present, China has become the third largest bond market in the world. Fixed income bonds mainly refer to treasury bond and financial bonds. Both treasury bond and financial debt have higher yields than fixed deposits.

The bond yield is mainly closely related to factors such as monetary policy, changes in market supply and demand, and the risk profile of securities. Because it is a standardized financial product, and the liquidity of bonds is relatively strong, when issuing treasury bond, it will generally face the scene of many investors scrambling for it. At present, the investment threshold of China's bond market is relatively high, and there are relatively few varieties that can be invested by investors. Most of them are mainly treasury bond and high-class securities of exchanges, and most of them are mainly suitable for institutional investors to allocate assets. In addition, due to its fully market-oriented operation, investors need to be more cautious when investing in bonds with low credit risk.

Bond funds

Bond funds mainly refer to funds that invest in bonds. These funds obtain stable interest income through investment in bonds such as treasury bond and corporate bonds. They are more attractive to investors seeking stable income. In terms of risk, they are lower than equity funds and hybrid funds, but higher than monetary funds. Bond funds can avoid issues such as bond investment threshold and difficulty in selecting investment targets, and the threshold is relatively low, making them more suitable for investment by individuals and non professional institutions. For more information on bond funds, Pai Paijun wrote in the previous issue of "Dry Goods!Should it, known as the new "internet celebrity" in the investment market, be allocated?》I have already introduced it to everyone.

Monetary Fund

The earliest commodity base was born in the last century7、80In the era of the United States, it was derived from large certificates of deposit, which were generally unaffordable to ordinary people. Therefore, fund companies bought them and then dispersed them, dividing them into many shares and selling them to ordinary people.

The biggest advantage of monetary funds lies in their good liquidity, which allows them to deposit and withdraw as needed, meeting the urgent needs of investors. This is also the fundamental reason for their long-term popularity. The current "baby" products in the market are mostly monetary funds, and the common feature of these financial products is that the return rate is relatively fixed, making it very convenient for investors to operate and can be directly applied for and redeemed online.

Financial insurance

In recent years, financial insurance has developed rapidly in China and has become an important component of the financial market. At present, most of the wealth management insurance products in the market are fixed income wealth management products, also known as investment insurance. While possessing insurance functions, wealth management insurance can also generate income. Insurance companies invest a portion of your insurance funds and regularly distribute certain dividends to policyholders. After the insurance period expires, the insurance funds will be returned. At present, there are generally three types of financial insurance available for investors to choose from, namely dividend insurance, universal insurance, and investment linked insurance.

Dividend insurance is a type of insurance in which an insurance company distributes the distributable surplus of this type of dividend insurance to customers in a certain proportion, in the form of cash dividends or value-added dividends. It has strict restrictions on capital investment, low risk, but also the worst flexibility, and cannot change the insurance amount in the middle. Universal insurance refers to that in addition to providing life insurance, the policy also provides a portion of investment income, which is linked to the overall investment income of the insurance company. The risk is moderate, and the income is also between dividend insurance and investment linked insurance. The characteristics of investment linked insurance are very similar to those of public funds, with no fixed interest rate policies and falling under the category of floating income products.

Trust products

In the fixed income market, trust wealth management products are considered a non-standard fixed income product. The financing party raises funds from investors through trust companies, and guarantees the repayment of principal and income upon maturity by mortgaging or pledging assets or equity to trust companies and third-party guarantees. Different types of trust products have different expected returns. According to the investment direction of trust funds, it can be divided into real estate trusts, industrial and commercial enterprise trusts, basic industry trusts, securities investment trusts, etc. In fact, only non securities investment trusts have the product characteristics of fixed income finance.

Trust is a high-end financial product, which is not well known to the public in China. Trust products are only suitable for qualified investors and have a relatively high investment threshold. The subscription amount for mainstream products is basically100Starting from ten thousand yuan. The biggest advantage of trusts is the independence of income rights and property. The trustor and beneficiary of the trust can be separated, and the trust assets also exist independently of the trustor. Due to this characteristic, family trusts have also become an important way for the wealthy to inherit and preserve their wealth, especially in European and American countries. Trusts can achieve tax avoidance and debt avoidance while also considering privacy, which can meet the needs of the wealthy.

Summary

According to Standard&Poor's household asset theory, investors should allocate their household assets70%Take out the left and right for allocation, and the assets taken out for allocation should also be divided into two parts40%Invest in financial products with stable returns, and30%Can invest in products with high risks and returns. There are many private equity funds that can serve as asset allocation tools on private equity ranking websites that do not charge subscription fees.

Unlike stocksfuturesThat's high-risk, fixed income investment can obtain returns while ensuring asset safety. In the face of poor global conditions and frequent market fluctuations, investors may wish to refer to the investment and financial management methods of fixed income investment for asset allocation.