Investment product is not a deposit, the product carries risk, investor should act prudently.
What is a Structured Investment Product (SIP)? *
A Structured Investment Product is essentially a combination of a traditional deposit and a derivative, where the return is dependent on the performance of some underlying financial instrument. Typical financial instruments linked to such deposits include market indices, equities, interest rates, fixed-income instruments, foreign exchange or a combination of these.
Please note that the Structured Investment Product is not an ordinary savings or term deposit. You can get the full principal (principal-protected SIP) or partial principal (non-principal protected SIP) amount stated in the structured investment product term sheet only when you hold the product till maturity. The return amount may be higher or lower than what you may receive from deposit products, such as ordinary savings deposit or ordinary term deposit or sometimes be zero. Your return amount will depend to some extent on market movements in the underlying. You should make sure that you are able to understand and evaluate the possible impact of movements in the applicable underlying and how this can affect your Principal Amount and Return Amount.
Features at a glance
- Structured Investment Product can be categorized to 100% principal protected or partial principal protected upon maturity.
- Tenor ranges from 1 month to 3 years.
- early redemption is not allowed or is only conditional (if applicable).
- Various payout structures, i.e. Touch Rebates, Range Accrual, Participator etc.
- Various underlying: FX, Interest Rate, Equity, Index, Commodity etc.
- Return is floating and determined by the performance of underlying.
- The return amount may be higher or lower than what you may receive from deposit products, such as ordinary savings deposit or ordinary term deposit or sometimes be zero.
* Please refer to product term sheet to get more detailed information.
Enjoy the many benefits of a Structured Investment Product
- It gives you the potential opportunity to earn a higher return than traditional time deposit.
- It gives you the flexibility of investment tenor varying from 1 month to 3 years to help with your liquidity management.
- It provides you a wide range of underlying assets and structures to match your financial needs, investment experience and knowledge as well as your risk tolerance.
What should an investor consider before investing in a Structured Investment Product?
Structured Investment Products come in different forms. You should consider whether a Structured Investment Product fits with your financial goals, risk appetite and personal situation. When choosing a Structured Investment Product, consider the following:
- Liquidity. Consider your liquidity needs as your money will be tied up for a period of time and early withdrawal may result in loss of part of your return and/or principal. Make sure that you have sufficient savings set aside before investing in Structured Investment Products.
- Risks. Determine whether you have the risk appetite for these products. Structured Investment Products are riskier than normal deposit products. You should understand the risks involved and what will happen in a worst-case scenario. If you are not familiar with the risks associated to structured investment products, you may read structured investment product term sheet or seek financial advice from a professional.
- Returns. As Structured Investment Products are tied to underlying financial instruments such as market indices, equities, interest rates, fixed-income instruments, foreign exchange, or a combination of these, you should understand how the performance of these instruments affect the return on your deposit. Remember that past performance is not necessarily indicative of future performance.
- Terms and conditions. Read the terms and conditions and other documentation of the Structured Investment Product carefully before making any commitment. If you do not understand how the product works, seek clarification. Do not buy anything you do not understand.
The material in this document does not fully describe the risks associated to structured investment products, and does not take into account your personal needs and financial circumstance. We recommend you to seek independent financial advice and professional opinion before acquiring the product.
What are the key risks of a Structured Investment Product? **
Liquidity risk - NO early withdrawal allowed: The Investment Product contemplates a fixed term of commitment on your part, returns (if any) will only be paid to you upon maturity of the Investment Product. Unless the Bank provides written consent, you are prohibited from any early withdrawal of your investment prior to Maturity Date. Such consent by the Bank is at its absolute discretion and subject to such conditions as it deems fit. Such conditions may reduce the Return Amount or the Principal Amount repayable to you. Accordingly, you may suffer substantial losses on the Principal Amount upon an early withdrawal or early termination of the Investment Product.
Foreign exchange risk: You may be exposed to foreign exchange risk as the Investment Currency may not be your preferred home currency of choice. Your potential return from a Structured Investment Product may not be greater than the foreign exchange losses due to fluctuation.
Return risk: Your investment return depends on the performance of the Structured Investment Product underlying. You may receive zero return or a return that is lower than traditional savings/time deposit interest rate for same tenor time deposit for the whole investment period.
Deposit taker risk: This is an investment product and not a deposit. Your Principal Amount may not be paid back in the unlikely event of the Bank being insolvent.
** For detailed risks associated with a Structured Investment Product, please refer to Structured Investment Agreement, General Risk Disclosure Statement and Product Term Sheet.
The table below is a simplified illustration of Structured Investment Product versus Time Deposit and Unit Trust in terms of returns and risks. It also shows how Structured Investment Product can diversify your investment portfolio in terms of returns and risks.
|Risk vs. Return Illustration|
|Time Deposit||Structured Investment Product||Unit Trust|
|Principal||100% Returned||100% or partially returned upon maturity||No Protection or Limited protection under specified condition|
|Returns||Fixed Interest Rate||Investment return or Not guaranteed||Not guaranteed|
|General Investment Risk Assumed and Corresponding Expected Returns||Low <-------------------------------> High
How does a Structured Investment Product work?
After the closing offer date of the Structured Investment Product, the Bank will use the collected fund to invest in Financial Market on Trade Date. Full principal (Principal-protected Structured Investment Product) or partial principal (Non-principal protected Structured Investment Product) will be invested into principal protected financial instruments, whose tenor matches the Structured Investment Product to ensure the full principal (Principal-protected Structured Investment Product) or partial principal (Non-principal protected Structured Investment Product) safety during the SIP investment period. The Bank will further use the investment yield generated from such financial instruments to purchase SIP underlying asset linked financial derivatives (i.e. options, or combination of various options etc) to enhance the potential return of the SIP. Upon Expiry Date, the Bank will calculate SIP final payout rate (if applicable) according to SIP underlying asset’s performance and its payout condition stated in the product’s term sheet. Customer will receive full principal or partial principal stated in product term sheet together with investment return (if applicable) upon Maturity Date.
Note: The above narrative only describes the simplest Structured Investment Product operation model for illustration purpose. It is not a reflection of all types of Structured Investment Products operation model and ANZ Bank (China) recommends you to seek independent financial advice and professional opinion before acquiring detailed product.
How do I purchase this product?
Contact our Relationship Manager to set up an appointment today, who will cover the following:
- Understanding your current financial position, and your risk profile.
- Explain the Structured Investment Product in selling window for more details, including product features and risks.
- Arrange you read, understand and sign the Structured Investment Agreement and the General Risk Disclosure Statement.
- Arrange you read, understand and sign the Term Sheet and Order Form.
- If you do not already have one, help you open an ANZ Personal Deposit Account. This requires your National ID/Passport.
Note: These documents are prepared in both Chinese and English. The Chinese version shall prevail in case of any discrepancy between the two language versions.
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