What distinguishes Equity Linked Structured Products from other types of structured products?

Equity Linked Structured Products are distinguished by their connection to equity markets while also typically providing some form of capital protection or guaranteed minimum return. This characteristic is essential because it combines exposure to potentially volatile equity assets with a safety net that cushions against total loss. The fact that they are linked to risky assets such as equities means that they can participate in market upside while also providing some degree of return assurance, usually through mechanisms like a minimum coupon or principal protection.

This makes them unique compared to other structured products that might not offer such guarantees or may not focus on equity markets. For instance, options that solely invest in government securities would not be linked to the equity market's performance at all, and options that promise unlimited returns with no risk are fundamentally misaligned with the principles of investment risk and return. Additionally, while some structured products may be based on a single type of risky asset, Equity Linked Structured Products can incorporate multiple equities or indices, adding to their complexity and value to investors seeking both risk and return.