Analysis Of The Expected Return And Realized Return Of Investment Products Issued By Domestic Commercial Banks Based On The Anchoring Effect

With the rapid development of China’s financial market and the advancement of global financial integration, the development of Chinese investment product market is obvious in recent years. By the end of 2015, the amount of personal investment products issued by commercial banks has exceeded 2.4billion, representing an increase of 45.44% compared with 2014, which shows that investment products have become essential products for investors to maintain and increase asset value. However, the management mechanism of our investment product market is not perfect, and investors’awareness to the investment products is not enough, so studies about investment products’risks and return are still limited.Since the commission of our country’s regulators to approve commercial banks’RMB financial business, the issuing amount and scale has increased year by year. However, our commercial banks are faced with a lot of competition during the developing process of investment products. On the one hand, many foreign banks start to enter Chinese financial market and issue their own investment products, which brings great competitive pressure for our Chinese banks in the aspects of development history, technology level and management mode. On the other hand, the internet financial products, such as Y Ebao and L Ctong, have risen rapidly and become another kind of investment way for investors. Therefore, on the question of how to make Chinese commercial banks maintain high competitiveness in the investment product market, people begin to focus on the risks and return of investment products.Under the above background and combined with the behavioral finance, this paper analyzes the correlation of the expected return and realized return of investment products issued by our country commercial banks. Based on the overview of personal financial business and the anchoring effect, this paper analyzes the related factors affecting the return of investment products. And then, with the data related to the 10482 investment products issued by 74 Chinese domestic commercial banks from 2004 to 2011 as research sample, this paper discusses the correlation between expected return and realized return of investment products, and explores whether the higher the initial anchor, the better the result is. In this paper, we find that the higher the maximal expected return, the higher the realized return of investment products is. In another word, if the maximal expected return is anchored a higher level, the realized return will be higher. When only the minimal expected return is given, then if the minimal expected is anchored a higher level, the realized return will be higher. Meanwhile, when both the maximal expected return and the minimal expected return are given, then the anchoring effect of the maximal expected return to the realized return is more obvious than that of minimal expected return. In addition, this paper also finds that our domestic commercial banks may exaggerate the expected return of investment products. Finally, based on the empirical results, this paper gives some suggestions to our country’s regulators, the issuing banks and investors of investment products.