There is a wide range of Structured Products available in the market and as they are complex in nature, there is no standard and simple explanation of how they work. They are broadly categorized into:

Principal-protection Note
Guarantees a rate of return equal to the investor’s initial investment regardless of the performance of the underlying reference asset(s). Whilst it is suitable for risk adverse investor whose dominant investment objective is to preserve its capital, it does not eliminate the other risks associated with Structured Products.

Yield Enhancement Notes
Offers a pre-determined yield in return for a downside risk for a stock, index or any reference asset(s). Whilst it appears to have predefined market risk or parameters, it does not eliminate the other risks associated with Structured Products.

Participation and/or Leveraged Notes
Offers further enhanced yield with little or no limit to upside participation or downside performance of the underlying reference asset(s). A Participation Note with leverage provides enhanced yield with inbuilt leverage. Whilst it appears to have predefined market risk or parameters, it does not eliminate the other risks associated with Structured Products. The most common type of Yield Enhancement Notes is the Equity-Linked Notes (ELNs).