Investing In US Dollar Assets Needs To Pick Investment And Not Blindly Follow Suit.

In recent years, with the steady appreciation of the RMB against the US dollar, many Chinese enterprises have made more renminbi to ensure stable export earnings through the "target redemption forward contract", and even some enterprises have borrowed money to appreciate the renminbi, magnifying the profits brought about during the appreciation of the renminbi.

Once the RMB exchange rate trend changes, it also aggravates the losses caused by the devaluation of the RMB to these people.

Looking ahead to the economic development in 2016, the global asset crash is the right time to pick up assets. On the other hand, the new currency policy provides a depreciating space for the renminbi. In the next two years or so, the renminbi will continue to depreciate.

While the global asset slump, it is also a true value investor allocation.

The best time.

Due to the increasing number of overseas asset allocation and Hongkong insurance, CAI and Hongkong's professional financial partners have formed a small team called the excellent asset group to provide relevant services to their friends.

You can call "little guide" as your little friend. This is the next little article.

The recent depreciation of the RMB against the US dollar has also attracted a great deal of attention from the market. Based on China's interest rate cut in the next two years, the US policy of raising interest rates has deviated from its policy, and its economic situation has not improved. Since 2016, the RMB has suffered from the devaluation pressure brought by market forces.

At the same time, professional institutions such as Macquarie, Goldman Sachs, Standard Chartered, Morgan chase and so on, there are significant differences in the trend of RMB in 2016, which means that the volatility of RMB will increase this year.

In the past, Yi Gang, vice president of the people's Bank of China, pointed out that in the future, the role of the market mechanism will be enhanced, and the two-way elasticity of RMB exchange rate will be increased. However, this process must remain stable at a reasonable and balanced level, so the trend of short-term exchange rate and interest rate mainly depends on the policy orientation of the Chinese government.

In the medium to long term, China's economic growth and labor productivity are relatively high, and internationalization needs to enhance RMB trading and reserve demand. With strong foreign exchange reserves, the RMB exchange rate remains basically stable, but in the next two years, the RMB may have a gradual and orderly depreciation of the US dollar.

Over the past ten years, the unilateral appreciation of the renminbi has brought a lot of hot money into China's arbitrage, and now there is a variable in interest rates and asset prices, especially in real estate or real economy.

It is expected that once the hot money is decisively left, it will accelerate the depreciation of the renminbi.

From the past in the trend of RMB appreciation, the trend of RMB and A shares has a high positive correlation at most times.

Every devaluation of the renminbi is accompanied by the fall of A shares or even a sharp dive.

The depreciation of the renminbi often leads to a decline in the valuation of local currency assets and a drag on the overall market. At the same time, due to the outflow of hot money, the liquidity environment of A shares will quickly tighten.

Investors worry that the depreciation of the renminbi will lead to the expected reversal of the real estate market, prompting investors to gradually abandon the property which is already overvalued.

Therefore, Xiao you believes that for the three or four tier cities, the possibility of falling house prices is bigger and bigger.

Especially those hot money that flows into China from the beginning of the RMB appreciation cycle will flow out of China because of the depreciation of the RMB, or dare not enter the Chinese investment market easily.

For families of students studying abroad, the depreciation of the renminbi means the same equivalent value of RMB, which has much less foreign exchange than before.

Relatively speaking, overseas tuition and living expenses may be significantly different from the expected planning.

For ordinary investors, the US dollar can be used as a decentralized allocation of household assets to hedge against the depreciation of the renminbi.

At present, the regular savings rate of the US dollar is relatively low, and the rate of US dollar regular savings is only 0.75% a year.

At the same time, we should consider the limitation of individual purchase of foreign exchange.

With the depreciation of the RMB against the US dollar, the US dollar assets can be allocated by investing in the overseas RMB qualified domestic institutional investor (QDII) fund. On the one hand, it does not need to consider the limitation of the amount of individual purchase of foreign exchange, on the other hand, it can get a higher return on US dollar deposits.

It is for the above reasons that Xiao Hao finds that such funds have become very hot in recent years, and even the situation of suspending subscriptions.

As of January 17th, there were 37 QDII funds to restrict subscription. Only in January 13th, 10 QDII funds were suspended due to the use of foreign exchange quota. Among them, 8 QDII funds of Boshi fund had been suspended in January 6th.

Investors can invest directly in the global fund portfolio other than the renminbi qualified domestic institutional investor (QDII) fund in Hongkong, including stock or bond funds in China.

Hongkong's financial product information is open and must be approved by the SFC. Employees must also be regulated by the monetary authority and the Securities Regulatory Commission.

Moreover, most of the funds in Hongkong are in the US dollar as settlement currency, and a small part is settled in currencies such as euro, Hong Kong dollar, pound sterling, Japanese yen and Australian dollar.

There are many choices of fund types, and some bond funds have annual interest rate of 9% per month.

It is higher than the US dollar financial products or the US dollar.

For investors who prefer fixed interest and more conservative, Xiao you can buy offshore sovereign bonds or listed company bonds.

Most of them are settled in US dollars, and some are in Renminbi, euro and Hong Kong dollars.

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The purchase of bonds does not need to bear fluctuations in the price of bond fund funds, and investment patterns are more like bank deposits.

In general, a monthly dividend is payable for 6 months, with a period of 1 to 10 years.

In the case of domestic sports brand 360 degrees, the current maturity rate of bonds issued in Hong Kong is about 6%.

Under the tide of RMB devaluation, a large number of investors hedge the insurance of Hongkong savings.

On the one hand, most of Hongkong's insurance is settled in US dollars or Hong Kong dollars, and there is a positive correlation between the rate of return and the interest rate of the US dollar.

The US dollar entered the interest rate cycle, and the policy return rate also increased correspondingly. The current dividend return annual report rate is about 3.5%-4%.

On the other hand, the purchase cost of insurance is not restricted by the amount of individual purchase of foreign exchange, so the record of the largest premiums life insurance policy in Hongkong has been record high every year. The latest premium record is as high as over 100 million yuan. It shows that some high net worth customers in China use hedging policy to hedge the risk of depreciation and increase the rate of return on investment.

With the overvaluation and excessive supply of domestic real estate and the devaluation of RMB, some investors have chosen more overseas real estate as part of asset allocation in recent years.

On the one hand, the property appreciation potential is higher than the domestic level, and the rental rate of return is as high as 5-15%, which is higher than the average 2-3% in China.

Despite the expectation of greater depreciation of the renminbi, many people began to allocate US dollar assets, but Xiao Hao reminded us to invest in US dollar assets and not blindly follow suit.

Faced with a wide variety of US dollar assets, how to choose is a lot of trouble for many investment people.

The cost and capital threshold are certainly factors to consider, but the most important thing is that they should choose according to their investment category, investment area and their own risk bearing capacity, and properly consult professional investment institutions.

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