A participation product is a financial product that is designed to allow the holder/ investor to participate in (i.e., get an advantage of) the performance of an asset or basket of assets. This is reflected in the so-called participation or participation rate, representing a fixed or predetermined percentage (participation or participation rate) by which any increase in the underlying asset/ basket/ index is multiplied. In the case of a structured product, the performance consists of a minimum fixed return in addition to a “participatory” rate of return (calculated by multiplying any increase in the underlying basket/ index by the participation rate).
The main examples of participation products include:
- Tracker certificates.
- Twin-win certificates.
- Outperformance certificates.
- Bonus certificates.
- Generally, any type of structured products with participation.
