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Structured product investment behavior in low-interest rate environments

Hirotaka Fushiya (School of Social Informatics, Aoyama Gakuin University, Sagamihara, Japan)
Tomoki Kitamura (Department of Business Administration, Tohoku Gakuin University, Sendai, Japan and Finance Research Department, NLI Research Institute, Tokyo, Japan)
Munenori Nakasato (Graduate School of International Management, Aoyama Gakuin University, Tokyo, Japan)

Journal of Risk Finance

ISSN: 1526-5943

Article publication date: 25 May 2021

Issue publication date: 29 June 2021




This study aims to investigate the impact of interest rates, the underlying asset and investment experience on the investment behavior of Japanese retail investors toward structured products (SPs).


Three treatments are constructed through internet-based survey experiments: interest rate, underlying asset framing and investment experience treatments. The interest rate treatment includes high- and low-interest rate environments. The underlying asset framing treatment includes equity and foreign exchange rates for the SP. The investment experience treatment includes experienced and inexperienced respondents for SPs.


The main finding of this study concerns the effect of the interaction between low-interest rates and investment experience. Specifically, SP-experienced investors tend to choose SPs in a low-interest rate environment and prefer equity-linked SPs, even though such SPs are overpriced. This finding is useful for financial regulators in formulating policies that protect retail SP investors in low-interest rate environments worldwide.


This study is the first to measure the sensitivities of investment behavior regarding the relative attractiveness of SPs to low-risk straight bonds, given interest rates, the underlying asset and investment experience. It provides evidence to support the development of SP regulations.



Authors thank Shinichiro Moridaira, Saburo Ono and the participants at the 2019 Aoyama Finance Seminar, 2019 Singapore Economic Review Conference and Nippon Finance Association 28th annual conference. This study was financially supported by the FY2017 Trust Research Grant from Trust Companies Association of Japan. Hirotaka Fushiya, Tomoki Kitamura and Munenori Nakasato declare that they have no conflicts of interest.


Fushiya, H., Kitamura, T. and Nakasato, M. (2021), "Structured product investment behavior in low-interest rate environments", Journal of Risk Finance, Vol. 22 No. 2, pp. 113-129.



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