A tempting assortment

Issuance of capital-guaranteed funds in Hong Kong is falling. As their tenor shortens and underlyings switch to alternative asset classes, structured products providers are tempting investors with open-ended funds that have maturities of up to eight years. But some observers doubt the appetite exists for such products. By Amanda Lee

Capital-guaranteed funds have been one of the most popular forms of structured product in Hong Kong over the past few years. But as the equity market and deposit rates are picking up in the territory, the demand for funds with conservative structures that offer high minimum guaranteed returns has slowed down. According to the Hong Kong Investment Funds Association, the net retail sales and redemption of guaranteed funds, which include both redemptions on maturity and early redemptions, were down

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