The double-decker thrill ride for Japanese retail investors may be over after a depreciation in emerging market high-yield currencies shattered profits and regulators stiffened rules. Asia Risk assesses the risks of these products and asks what investors will look to next
In Japan's multi-decade deflationary environment, the options for investors are limited: stick to Japanese government bonds (JGBs) and receive certainty over retaining your principal if little in the way of returns, or opt for something a little racier in the search for yield.
Japanese investors, particularly those in the 60-69 year age group, who are contemplating a long retirement on a low-yielding asset base, have opted for the latter - with volumes of so-called 'double-decker' products rising from virtually nil in 2009 to more than ¥9.2 trillion ($114 billion) in assets under management at their peak in July last year, according to figures provided by Morningstar.
(risk.net)
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