(At Nuts & Bolts, we review structured products and other investment and financing instruments launched in the market. This column scrutinizes and examines the offerings and the deal structures, and what makes them stand out in the capital markets landscape.)

In these times of heightened market volatility and economic uncertainties, there is a growing appetite among investors for relatively low-risk investment opportunities in structured products.

These investment options offer a degree of stability and security that can be particularly appealing to investors in the current environment. Innovative banks have seized this opportunity to wrap Sharkfin notes in a principal-protected format.

A Sharkfin note is a structured product that is linked to the performance of an underlying asset or index with a payoff structure that resembles the shape of a shark’s fin.

Generally, the principal in Sharkfin notes is not protected. However, a Sharkfin note in a principal-protected format enables investors to capitalize on the volatility of the underlying asset or index with 100% protection of its principal, regardless of whether the underlying asset or index goes up or down.

In the best-case scenario, the principal-protected Sharkfin note can potentially generate higher returns than an assured coupon with full principal if the underlying asset or index finishes within the designated range.

In the worst-case scenario where a knock-out barrier is breached, investors are still able to redeem their full principal investment with an assured coupon at maturity, which is called a knock-out rebate.

The demand for principal-protected Sharkfin notes in commodities and equities is on the rise as more investors, who hold a range-bound view, seek to capture potential returns based on the performance of the underlying asset or index while also limiting their downside risk.

One of the structured products manufactured by BNP Paribas Wealth Management, the "twin-win capital return notes with minimum coupon linked to gold", displays its strength by offering principal-protected Sharkfin notes in commodities such as gold.

The offering has been nominated for Best Structured Investment and Financing Solutions in Commodities in The Asset Triple A Private Capital Awards for two consecutive years.