Cacib: credit and hybrid payoffs gaining traction across Apac markets

Equity-linked structured products remain the dominant force across Asia, supported by strong demand for income, growth participation and downside protection. However, shifting regional risk appetite, evolving underlying selection across Korea, Hong Kong and the US, and the rapid rise of credit-linked notes are gradually reshaping the structure of the market and expanding the role of hybrid solutions.

Accumulators on Hong Kong stocks have been a major tool to accumulate their preferred Hong Kong shares- Rishad Shaefer

Equity-linked products continue to dominate structured product issuance across Asia, reflecting a combination of investor familiarity, flexible payoff design and strong distribution momentum.

For Rishad Schaefer, head of equity sales and structuring for Asia at Crédit Agricole CIB, the enduring appeal of equities lies not only in product versatility but also in deeply embedded investor behaviour.

“Investor appetite for income and growth, coupled with the appeal of high coupons and downside buffers, drives the demand for conventional equity-linked structured products such as Fixed Coupon Notes (FCNs),” he says.

A key structural evolution has been the growing use of basket-based underlyings. By combining multiple stocks, issuers are able to enhance yield through volatility dispersion and low correlation effects, while also diversifying single-name risk.

“These are now mainly structured on baskets of shares to extract higher yields from higher volatilities and low correlations between stocks,” Schaefer notes.

Thematic and macro drivers continue to reinforce equity demand. Artificial intelligence remains a dominant theme, particularly through US large-cap technology exposure, where volatility expansion has supported autocallable issuance.

Equities have also demonstrated resilience through episodic geopolitical shocks, quickly recovering from drawdowns and reinforcing investor confidence in the asset class as a long-term allocation tool.

Regional dynamics add further complexity. In South Korea, strong retail participation and elevated risk appetite have made the market a global centre for leveraged equity products following the KOSPI2 rally.

Schaefer highlights increasing demand for autocallables on Korean single stocks, supported by extraordinary performance in names such as SK Hynix and Samsung Electronics, with the latter crossing the $1 trillion market capitalisation milestone this year.

He also points to a growing pipeline of listed innovation: “Korean investors are also waiting for single-stock leveraged exchange-traded funds tied to some Korean tech companies which should be investible in the coming weeks.”

At the same time, Hong Kong has re-emerged as a key driver of regional flow. Renewed optimism around artificial intelligence and government policy support has fuelled demand for local equities, particularly through accumulator structures.

“Accumulators on Hong Kong stocks have been a major tool to accumulate their preferred Hong Kong shares, with a corresponding decrease in exposure to North America,” Schaefer says.

This has resulted in a more balanced regional allocation within structured products, moving away from the previous concentration in US technology names.

However, mainland China flows have moderated after record participation in Hong Kong equities last year, as domestic AI opportunities have increasingly absorbed investor attention.

Product universe expands

While equities remain the dominant asset class, credit-linked notes (CLNs) have emerged as one of the fastest-growing segments in Asia’s structured product landscape.

Edward Wong, head of credit sales for APAC and the Middle East at Crédit Agricole CIB, attributes this growth to improved macro conditions, elevated yields and increasing investor sophistication.

“Crédit Agricole CIB ranks among the most active credit-linked notes issuers in the market,” he says.

The macro backdrop has been particularly supportive. Higher base rates and the beginning of the US Federal Reserve’s easing cycle in 2025 have enhanced the attractiveness of credit exposure for yield-focused investors.

“The current market environment… has driven strong investor appetite for credit deployment,” Wong explains.

Issuance remains anchored in high-quality credits, including sovereigns, supranationals, public sector entities and global systemically important banks. However, demand is gradually expanding into Asian corporate credit, particularly in technology-linked sectors.

A key shift is the increasing sophistication of how credit is used within portfolios. Rather than being treated as a standalone allocation, credit is increasingly embedded within hybrid structures alongside equities, rates and FX.

“We are observing increasing sophistication among regional clients, who are becoming more receptive to innovative payoff structures to optimise returns,” Wong says.

Callable structures and zero-coupon formats remain widely used, reflecting demand for yield enhancement, flexibility and tailored cashflow profiles.

Market infrastructure developments are also supporting growth. The expansion of standardized credit indices is improving liquidity and making credit exposure more scalable within structured solutions.

Looking ahead, Wong expects continued evolution in both product design and underlying diversification.

Beyond traditional issuers, he anticipates greater exposure to emerging market credit, including CEEMEA and Latin America, alongside increased use of hybrid cross-asset structures.

“We maintain a constructive outlook on the Asian CLN market,” he says.

Asia’s structured products market remains firmly anchored in equities, but the nature of that exposure is evolving. Basket structures, thematic overlays and shifting regional allocation between the US, Hong Kong and Korea are reshaping how equity risk is packaged and distributed.

At the same time, credit-linked notes are transitioning from a niche yield-enhancement tool into a mainstream pillar of structured product issuance. Supported by higher rates, improving liquidity and rising investor sophistication, credit is increasingly being used in combination with other asset classes rather than in isolation.

The result is a market that is not rotating away from equities but broadening around them. As investors seek more targeted income, diversification and flexibility, the next phase of growth in Asia is likely to be defined by the expansion of credit and hybrid multi-asset structures operating alongside a still-dominant equity core.

This is an abstract of the SRP Asset Class Report 2026 which is available for download here. 

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