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Just when you thought the market could not surprise you anymore, a recent Bloomberg report said that structured investments, especially credit-linked notes, have become very popular with private investors this year. As the stock and bond markets become more volatile, you can see a small but strong shift toward investments that combine credit risk with the potential for high returns. And right now, credit-linked notes are getting a lot of attention, especially since big banks like DBS say that more of their private banking clients are interested in them.
What You Need to Know About Credit Linked Notes Right Now
Credit linked notes (CLNs) might be the answer if you have ever looked at the world of fixed-income investments and wondered where the "smart money" goes when things are uncertain. A CLN is a structured note whose value depends on the creditworthiness of a reference entity, like a corporation or a government. You can get higher potential yields than similar bonds if you agree to take on a certain amount of credit risk.
Why They Are Popular Again
There is a reason why people are interested in credit linked notes again. It happened because of a perfect storm of conditions around the world. After years of aggressively raising rates, central banks are starting to lower them. Investors are looking for yield without jumping into stocks right away. The 2025 Global Fixed Income Outlook from JP Morgan says that structured credit instruments have become 28% more popular among wealthy investors looking for ways to diversify their portfolios and protect themselves from inflation.
You may have noticed that traditional bonds have not been able to give you good returns lately. CLNs tell a different story. They are attractive because they can help you make money and are flexible, letting you choose your reference credits, tenor, and structure. Investors who want control without a lot of hassle are finding that part of personalization more and more appealing. Top Asian banks like DBS have been talking about this flexibility as a way to make structured notes fit each client's unique risk appetite and market outlook.
The Strange Beauty of Taking a Risk
The psychological appeal of credit linked notes is what makes them different from other types of notes. It is strange how satisfying it is to know exactly what risk you are taking. You know what kind of credit event would cause a loss. You can use credit ratings, research reports, or even your own judgment to figure out how healthy the issuer is.
That openness is different from the hidden volatility that can happen with stocks or cryptocurrencies. With CLNs, you can see and measure the risk. It means, "I will take that chance, but only if I can." This way of thinking fits perfectly with the investing trend of 2025: taking risks based on facts instead of guessing.
What Smart Investors are Doing What is Different
You might think that only institutions can use credit linked notes, but they are becoming more common. More private clients in Singapore are adding them to their portfolios through banks and wealth managers. The strategy is often to combine CLNs with traditional fixed-income products to find a balance between stability and yield.
Like any other structured investment, CLNs are not right for everyone. You need to know what the terms mean, keep an eye on credit conditions, and decide how comfortable you are with the possibility of losing money. But for people who do their research or work with experts like DBS's wealth advisory teams, the reward can be worth the risk.
The Bottom Line on Notes Linked to Credit
You live in a market where old strategies do not work the same way they used to. Bonds alone might not help you reach your income goals, and stocks are still very risky. Credit-linked notes fill that middle ground by giving you a creative and smart way to get higher yields while keeping your credit exposure in check.
They are not just tools for making money; they show how modern investors think: curious, careful, and open to new ideas.
If you are interested in how credit-linked notes could work with your investment strategy, talk to your bank or financial advisor about your options. Sometimes the best chances are the ones that are not on the front page but that you can see more clearly when you look more closely.