Perspective on the mechanism of financial products, can derivative products rise with the trend?

On July 17th, Xingyin Wealth Management terminated the Xingdong Multi-Strategy Closed-end Enhanced Fixed Income Wealth Management Product No. 112 ahead of schedule. After reviewing the product manual, the reporter found that this product is linked to the CSI 1000 index, with a knock-out mechanism, and the financial derivative invested is a call auto-knock-out option. Benefiting from the recent strength of the stock market, the knock-out condition was triggered, leading to the early termination of the wealth management product. Research by the reporter found that this year, the issuance of "fixed income +" bank wealth management products with low volatility assets, linked to related indices, and embedded option structures has been increasing. At the same time, some structured bank wealth management products with these features have also been terminated early due to triggering knock-out conditions, meaning "profit stops when the target is reached." This situation involves multiple wealth management companies and products linked to the CSI 1000 index. Industry insiders suggest that in a low interest rate environment, the yield of fixed income assets, which serve as the cornerstone of bank wealth management, is under pressure, interest income is shrinking, and spread income is hard to find, driving banks to accelerate their transformation. Wealth management companies need to further seek returns from multiple assets and strategies, develop rights-containing products, and enhance income flexibility. At the same time, this "riding the trend" requires facing tests in research and risk control systems, as well as risk-return preferences on the liability side. Wealth management companies also need to hone their ability to control drawdowns, and implement timely profit-taking and stop-loss measures in order to truly capitalize on rights-containing products.