Asia investors eye fund-linked structures amid US rate rises

Principal-protected fund-linked products on the rise as fixed-income investors seek safety

Fund-linked derivatives allow investors to retain their exposure using structured solutions applied to the underlying fund

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Private banks in Asia are driving a resurgence in demand for fixed-income fund-linked derivatives products, as investors grow increasingly nervous about the impact that US rate rises could have on their investments. One bank reports volumes rising by “a few billion dollars” since last August.

With yields being squeezed across the region, fixed-income investment funds have proved a popular way of topping up returns, but rising interest rates threaten to erode their value. Investors have looked i