Korean Traders Chase 40% Coupons as Risk Appetite Survives Rout
South Korean retail investors are increasingly purchasing high-yield structured products tied to major tech stocks like Samsung and SK Hynix. Despite a recent market rout, these investors are seeking returns of 40-50% through equity-linked securities.
Why it matters
This trend illustrates the high risk appetite of retail investors in South Korea and the potential for systemic financial risk if underlying stock prices drop significantly.
A historic stock selloff has driven South Korea’s retail investors toward complex structured products as the risk-loving cohort continues to look for ways to boost returns.Equity-linked securities dangling annualized coupons of 40% to 50% have attracted renewed interest from mom-and-pop traders. Sales rose to more than a three‑year high in July, led by notes tied to Samsung Electronics Co. and SK Hynix Inc.The boom comes as regulators moved to curb frenzied retail demand for single-stock leveraged exchange-traded funds, which were blamed for amplifying market swings during the benchmark Kospi’s 22% plunge last month.
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