Asia’s Rich Drive $200 Billion Revival in Complex Equity Notes

8m(idwd1wpvaoy{uvgm4dkcw_media_dl_1.png Source: JPMorgan

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(Bloomberg) — Rich Asian investors are plowing record money into complex stock bets that saddled them with big losses just a few years ago. 

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Issuance of structured products linked to Hong Kong and Singapore equities has surged 80% this year to a record of more than $200 billion, according to estimates from BNP Paribas SA, one of the top issuers. Products known as accumulators — which make their holders continuously buy stocks at preset levels — and fixed-coupon notes that offer monthly returns are particularly popular.

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The revival coincides with a surge in Asia’s equities driven by the artificial intelligence frenzy. Typically marketed by private banks to wealthy clients, structured-note bets this year have been concentrated in Chinese mega-caps such as Alibaba Group Holding Ltd. and Tencent Holdings Ltd., a shift away from US names like Nvidia Corp. The instruments help holders build exposure to stocks in a more controlled way, though their complex structure means losses can worsen under certain conditions.

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“Issuance was very limited for the last few years, up until September of last year,” said Tony Lee, head of global equity-derivatives strategy at JPMorgan Chase & Co., referring to notes tied to Asian stocks. “Because of the recovery of the Chinese market, the product underlyings have shifted from US stocks into Hong Kong stocks.”

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While US investors’ appetite toward structured products has been growing, Asia remains the main market. More than 60% of the global sales came from the region in the first seven months of 2025, led by China and Hong Kong, according to industry data provider SRP. 

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The instruments generally offer a smaller maximum payout than stocks, but some investors are lured by their regular, fixed payments that are usually higher than bond yields, or by the embedded protection they offer. 

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Yet the risks can be overlooked: The Lehman Brothers collapse in 2008, the Covid outbreak and China’s internet crackdown that triggered a multi-year stock slump are just a few incidents that handed steep losses to investors. 

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Traded over-the-counter, accumulators are contracts that force investors to buy a set amount of underlying securities at a fixed price over regular intervals. In a rising market, the purchase price is usually at a discount. During downturns, however, holders are often locked into buying at above-market prices.

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At CA Indosuez Wealth Management, some of the most-traded accumulators require investors to purchase double the initially agreed amount of Alibaba shares if the stock price drops more a certain amount, often between 10% and 20% of the level at the start of the investment, according to Ting May Woo, the firm’s head of advisory solutions in Singapore.