Yuanta Securities (Korea) is leveraging on its group network to expand its offering in South Korea with a range of Chinese-themed funds that are being sold as derivative linked securities (DLSs).
The firm has been marketing its CSOP Hermes China A-Share Fund linked DLSs range since early 2015 which has collectively raised KRW3.7bn (US$33m). In May, the firm launched the Yuanta Minsen A-Share Fund Segregated Portfolio linked DLSs which racked up KRW7.7bn ($694m) in sales.
“Demand [for these products] comes from high net worth individuals who have a directional view on China’s stockmarkets,” said an insider source. “The network of Yuanta Group [also] facilitated the use of Chinese funds, especially the Minsen A-Share Fund.”
The DLS linked to Yuanta Minsen A-Share Fund Segregated Portfolio featured a reverse knockout payoff with 50% downside barriers.
A market source was quoted by the local media saying that these products will be attractive once the Chinese stockmarket enters a consolidation phase after a bull run as it will be an alternative instrument to other products that only bet on the upside of the Chinese stockmarket.
This range has been only available to private banking investors via private placements, said the Yuanta official.
“[Yuanta] will continue to leverage on its Chinese network to source products that match investors’ needs,” he said. “If there is demand, we will also consider launching them in the retail market.”
Related stories
Daishin adds stability to US ELS range by reducing knockout barriers
Busan Bank lowers entry level for ARS-linked ELBs
South Korea’s Hana Daetoo puts GTAA prop index on global stage
Dax index returns to South Korea