A product that is usually held for investment, either as a generic security/ instrument such as stocks and bonds or is based on a wide range of underlying securities/ instruments (structured or bundled in a certain manner) with the aim of deploying the funds invested for profit making and/ or capital gains. Such products are those whose downside exposure does not exceed any given percentage price decrease in the underlying. These products include capital protection products, yield enhancement products, and participation products:

• Capital protection products guarantee that a fraction of the investment (typically but not necessarily 100%) will be paid back (holder) to the investor at maturity, unless a under extreme circumstances (such as, the case of default). However, major losses, apart from counterparty risk, may also arise. Within this category, there are capped products/ capped capital protection products (which specify a maximum return) and uncapped products/ uncapped capital protection products.
• Yield enhancement products offer capped returns and expose investors to potential losses. The risk of potential losses may be reduced or mitigated by a discount.
• Participation products offer uncapped participation in any appreciation of the underlying (upside potential). The upside participation rate may exceed 100%, e.g., for specific products (such as outperformance certificates). In case of downside, a full participation (1:1) in the value depreciation of the underlying may also be part of the mechanism.