High-net-worth individuals across Asia are driving a $200 billion resurgence in complex equity-linked notes, signaling renewed confidence in structured products during a volatile global market environment. The trend reflects growing appetite for tailored instruments offering enhanced yields and capital protection features.
- Total issuance of complex equity notes in Asia reached $200 billion in 2024
- A 75% year-on-year increase from 2023 levels
- Primary markets include Hong Kong, Singapore, and mainland China
- Instruments often feature embedded derivatives and capital protection
- Demand driven by ultra-high-net-worth individuals seeking yield alternatives
- Backed by performance linked to regional equity indices and select stocks
A wave of investment from affluent investors in Asia is revitalizing the market for complex equity notes, with total issuance reaching $200 billion in 2024, according to internal financial records and transaction data. These instruments, often structured with embedded derivatives and multi-asset exposure, are being favored by private clients seeking returns beyond traditional fixed-income products amid low global interest rates. The revival is particularly pronounced in Hong Kong, Singapore, and mainland China, where wealth management firms have ramped up product launches targeting ultra-high-net-worth individuals. Notable issuers include several large regional banks and asset managers, though specific institutions remain unnamed in disclosed filings. These notes often link performance to indices such as the MSCI Asia Pacific Index or individual equities, incorporating features like barrier options, autocallability, and capital guarantees. Market analysts note that the $200 billion figure represents a 75% increase from 2023 levels, underscoring a shift from risk-averse behavior to strategic allocation in structured products. The surge coincides with a broader recovery in equity markets across the region, especially in tech and green energy sectors, which are frequently embedded in the underlying reference assets of these notes. The trend impacts a range of stakeholders, including global investment banks that underwrite the products, local wealth advisors who recommend them, and financial regulators monitoring risk concentration in retail investor portfolios. While the instruments offer potential for higher returns, they also carry complexity and illiquidity, raising questions about investor suitability and long-term market stability.