In the investment and wealth management market, the rate of return has always been an important indicator to measure risk; Remember what President Guo said at Lujiazui Forum?

If the rate of return exceeds 6%, it is necessary to put a question mark; if it exceeds 8%, it is very dangerous; if it exceeds 10%, it is necessary to be prepared to lose all the principal. Once financial products and investment companies that promise high returns are found, they should remind each other and actively report them, so that all kinds of financial frauds and ever-changing Ponzi schemes can be seen at a glance.

The speech at that time caused a lot of people's disdain and sneer. From now on, this is really a golden rule of investment. Many investors who have paid tuition fees and learned well have begun to invest rationally. More than 8% of wealth management products are untouched, and more than 6% of products are far away, preferring to buy money into stable wealth management products such as bank certificates of deposit.

What's wrong with this operation? Of course not, investment and financial management, principal security is always the first; However, is there a problem with this practice? Of course there is!

The goal of investment and financial management is to maximize income under controllable risks, and invest money in bank financial products such as large deposit certificates and national debt; Although the risk has been controlled, the income has not been maximized, resulting in a certain opportunity cost.

Friends who care about the author know that I will definitely say trust next. In reality, it is an indisputable fact that the yield of trust products is significantly higher than that of similar wealth management products for a long time. The product yield of trust companies is generally above 7.5%; 8%-9% is the norm; If the amount is large enough, then 10% is also acceptable.

Faced with such a high rate of return, many people will have such a question, is there a greater risk hidden in trust products? Not exactly. The high yield of trust products shows that their products have certain risks, but compared with unreliable online loans and private placements (not to mention illegal fund raising). The risk of trust is completely controllable, which was also discussed in previous articles.

Today's article focuses on the high returns of trust. Is the trust's high return reasonable, and from what aspects? What is the reason? The author has always been committed to providing easy-to-understand, professional, reliable and lasting services, and has always encouraged investors to buy wealth management products issued by formal financial institutions. After all, there are too many traps in investment and financial management.

Reason 1: Capital control and currency undervaluation.

Capital control

The state has implemented a certain degree of capital control, and under this control, a dam has undoubtedly formed, isolating the domestic and foreign money markets. This dam is like two different water levels. As a high-interest currency, RMB forms a high water level, while other known circulating capital abroad is at a low level.

Of course, it's true. As a transitional country, its foreign exchange market is facing much higher risks and uncertainties than developed countries. In order to ensure the smooth operation of the domestic economy, certain measures must be taken. Especially in the current period of increasing internal and external uncertainties, it is not only necessary to implement a certain degree of capital control, but also plays a vital role in national financial security and import and export stability.

Objectively speaking, capital controls will continue to exist in the process of incomplete convertibility of RMB and market-oriented reform of exchange rate. We should understand this provision and support it with both hands. After all, it is related to national financial security, not a trivial matter.

Currency undervaluation

Since the financial crisis in 2008, many western countries have started to adjust interest rates, and the benchmark interest rates in many countries are even zero or negative, so the liquidity of overseas capital markets is at a very abundant level. Even now, foreign liquidity is still very abundant.

Moreover, according to the principle of interest rate parity, in a free-flowing system, the higher the interest rate, the higher the pursuit of money, thus boosting the demand for local currency. The consequence is that the local currency appreciates and the foreign currency depreciates; This is the content of the principle of university economics.

As you can imagine, once the capital control is lifted, a large amount of hot money will flood into the domestic market rapidly, which will reduce our return on assets to the world average, which will inevitably be detrimental to the development of China. Therefore, a certain degree of capital control must be carried out, and the effect is that the currency is undervalued.

Summary: Capital control and currency undervaluation are the basic sources of high yield of financial products, including trust products.

The second reason: the interest rate "dual track system"

Today, China's loan interest rate has basically achieved marketization, but the deposit interest rate has not been fully liberalized for some reasons, or only moderately liberalized. This is the current situation of the dual-track interest rate system in China, but it is mainly aimed at bank credit funds.

Trust has a high interest rate, which is well founded.

According to the regulations, financing trust plans do not need to refer to the floating limit of the benchmark interest rate stipulated by the People's Bank of China when issuing trust loans. According to the regulations, financing trusts can set the corresponding interest rate within the range of not more than 4 times the benchmark interest rate, which is the compliance basis for the high-yield sources of trust products, and the flexible range is very envied by banks.

Therefore, we can see that the high yield of trust products can be based on laws and regulations, instead of usury, cash loans, arbitrary pricing and various routines that harm countless people. Once hooked, it's really miserable, but that's another story.

Long-term optimism about China

It should be noted that although China's economic growth rate has declined to some extent in recent years, the downward pressure is still relatively large. However, the general trend of long-term economic and social development in China has not changed, and China will face unprecedented changes in the next 30 years. This is the central argument. As China people, we must all evaluate this belief. The future is bright and the process is tortuous.

The rise of the Chinese nation will surely come true! (serious face)

Closer to home, in the process of China's sustained economic development, trust funds are quite flexible compared with bank credit funds with stricter control and supervision. Therefore, it has shared more fruits of real economy growth and played a leading role in interest rate marketization. Therefore, the yield of trust products is closer to the real interest rate level.

Bank channel financing has long faced problems such as interest rate control, credit scale control and capital use restriction. This is necessary because banks are the main force in the financial market; Risk prevention is the first priority. In addition, in recent years, a series of regulatory restrictions on various innovations of banks have made it impossible for banks to lend. Trust financing channels with relatively high cost and good flexibility have become an important choice for capital-intensive industries such as real estate, infrastructure and mineral energy.

Summary: The second reason for the high yield of trust products comes from the current situation of the dual-track interest rate system in China.

The third reason: comprehensive use of a variety of financial instruments, deep-seated grasp of risks.

Friends who have contacted banks or credit know that the credit funds issued by commercial banks belong to the nature of creditor's rights, and the means of risk control are extremely limited, mainly focusing on mortgage and guarantee. There are also many problems in mortgage and guarantee; For example, the value of collateral, the existence of legal proceedings and defects, the guarantee unit itself is difficult to guarantee and so on. After this happens, banks will be very passive. Similar to holding equity and investing with options, banks cannot and are not allowed to do it.

Trust is different. Trust, known as the "light cavalry" of the financial industry, is the only legal financial institution in China that can span the three fields of money, capital and industry. Therefore, on the trust platform, all financial instruments can be integrated, including common equity, creditor's rights, mixed stock bonds, convertible shares, convertible bonds and so on. For the flexible use of funds, this is also the reason why the trust license is so valuable, because the trust itself is similar to a "full financial license", which is its unique institutional advantage.

Taking the real estate trust that investors are familiar with as an example, real estate trust can be said to be a "big stage" for the comprehensive application and performance of trust; For this kind of trust, besides loans, there are some flexible forms of capital utilization, such as share repurchase, the right to return on specific assets and the trust plan as a limited partner (LP).

While meeting the financing needs of the financier, the trust can also go deep into the enterprise through various arrangements, with more advanced means and more adequate risk control measures. For example, the trust can send personnel to the management to realize seal management and ensure the reasonable and compliant use of funds; Therefore, trust has greater control over project risks, and high returns are natural.

Summary: The use of various financial instruments and a deeper grasp of risks are the third reason why trust products can achieve high returns.

The fourth reason: leverage strategy and structural stratification.

The charm of financial leverage operation

Where is the charm of finance? I believe that a thousand readers have a thousand answers. But there is one thing that I believe everyone will not deny, and that is the lever game. Providing leverage support for stable profit opportunities, low cost and high leverage ratio is an art and a challenge; This is the charm of finance.

Take futures investment as an example, its unique margin system is leverage. However, leverage is a double-edged sword, which magnifies the benefits as well as the risks. If investors operate correctly, they may make a lot of money, and once they make mistakes, they may lose all their money. Moreover, we should know that the application of leverage strategy includes not only margin trading and futures, but also investment products such as warrants and options.

Of course, this only shows that there is no suggestion to encourage lending to increase leverage, which is dangerous and against the policy.

Leverage and Structured Strategy

Another typical application of leverage strategy in trust is the so-called structured stratification. Structured stratification, as one of the most commonly used internal credit enhancement measures, is also called limited principal guarantee system. Friends who have bought trusts or know about trusts know that many trust products will control risks through stratification.

Structured stratification is to divide the collective trust plan into priority benefit share and secondary benefit share; The share of priority beneficiary rights is for high-net-worth customers and other qualified investors of trust companies; The secondary beneficial right is generally subscribed by the counterparty of the financing party or the third party associated with it. In the order of repayment, the secondary beneficial right is inferior to the priority beneficial right, but all the other beneficial rights are in a subordinate position.

Simply put, the secondary is the priority safety mat.

As the secondary principal of the financier and counterparty, out of his familiarity with the project and confidence in the investment ability, he is willing to give some high returns to the priority investors who provide leverage support before the trust is issued. For example, under the leverage ratio of priority and sub-priority of 2: 1, the interest rate of financing cost that the client is willing to pay is about 10% on average, which is equivalent to several times the yield of large deposit certificates, which is quite attractive to priority investors.

Summary: Leverage strategy and structured stratification are the fourth reasons for the high returns of trust products.

Reason 5: Cross-market arbitrage

In reality, money market, capital market and industrial market present obviously different risk and return characteristics. Even in several sub-markets under the capital market, there are totally different high-yield opportunities, which provides a basis for arbitrage in the trust market. General funds can only enter one or two fields, and trusts can all be opened.

For a simple example, the average customer's deposit interest rate is only 0.5%, but the interbank lending rate Shibor is maintained at around 2-3% in most places. Money funds, represented by Yu 'ebao and Licaitong, have recorded a high yield of 5% even in the case of tight funds.

This is only the banking market, and the industrial market usually follows the valuation method of this asset; On the other hand, in the capital market, the P/E ratio is between 20 times and 30 times, and the P/B ratio is even lower than this figure. The difference is too obvious. This is an arbitrage opportunity in the primary market and the secondary market, and this opportunity exists for a long time; It is precisely because of this that it attracts all kinds of venture capital and private equity. Up to now, China's investment in these two types of equity has already exceeded 10 trillion.

For banks, securities firms and other financial institutions, they can't give full play to their cross-market investment advantages like trusts, and bring investors into their difficult investment fields to obtain relatively high returns.

Summary: Multiple market advantages are the fifth reason for the trust's high income source.

Reason 6: Other factors.

As a flexible and efficient fund arrangement, trust can also obtain a very high rate of return in several other ways. For example, trust+limited partner (LP), transfer of beneficial rights with the participation of third parties, model portfolio investment of targeted asset management plan of docking brokers, etc.

Break through supervision to carry out regulatory arbitrage, give full play to the advantages of large customers' funds, and customize a single product. , are important reasons why the trust can achieve high returns, so I won't do it here.

Concluding remarks

The six reasons summarized above are the basis of high income of trust. These six reasons are domestic capital control and currency undervaluation, dual-track interest rate system, the advantages of the trust's own diversified financial instruments, leverage and structural strategies, cross-market arbitrage and other arrangements.

It can be seen that the high income of the trust is well-founded and legal and compliant; Be accepted by the market. In the process of continuous creation, the author repeatedly emphasizes the reliability and reliability of trust as a licensed financial institution, and this paper also tells you the feasibility of its rate of return.

According to the data of 20 18 collective fund trust plan, the average rate of return is 7.90%, which is higher than 20 17. This is mainly caused by the tight capital market of 20 18 and the narrowing of financing channels for enterprises. Of course, the trust rate of return is also related to the level of market liquidity and the difficulty of corporate credit financing.

Since the beginning of this year, the circulation of various real estate trusts and credit trusts has dropped sharply compared with last year. The most important reason is the relaxation of local debt issuance and the smooth financing channels for large real estate enterprises. Therefore, it is not surprising that trust products are hot and second light frequently this year.

It can be seen that on the basis of a series of institutional advantages, trust can control risks to a greater extent than other institutions, so it should obtain a higher rate of return than bank wealth management and brokerage asset management, and this rate of return is relatively safe and reliable.

Even if it exceeds the 8% mentioned by Chairman Guo, the risk is still under control; And there are few substantive breaches in history. Even the "Thunder King" Zhongjiang Trust, many political trust projects in fourth-and fifth-tier cities have also been honored. After all, there are various means of risk control, such as mortgage and guarantee, so few of them can't be redeemed, which is essentially different from grassroots and Qian Bao.

I hope investors can deeply understand the characteristics of trust products and the sources of high returns; When choosing investment and financial management, we must choose financial products issued by formal financial institutions, which is the fundamental factor to realize sustainable income. Don't invest your money in all kinds of illegal pyramid schemes just because you are greedy for a short time. You may gain only a little interest, but what you lose is all the principal, even all the security of the old-age life.

This has happened and will happen again. So investing tens of millions is the first one. Choosing reliable financial institutions and consultants is the guarantee of capital security!