ETPs usually follow the price movements of a financial index or benchmark (e.g. the FTSE 100) and can offer an alternative way to gain exposure to a wide range of markets, without incurring all of the costs of investing directly.
What is an Exchange Traded Product?
There are three types of ETPs:
Exchange Traded Funds (ETFs)
Exchange Traded Commodities (ETCs)
Exchange Traded Notes (ETNs)
Although each has distinct structural differences, they generally follow the price movements of a market, whether they are tracking indices, commodities, basket of shares or FX rates. ETPs allow you to invest in a wide range of investments and markets. However, they vary by investment market, investment strategy, legal structure and risk.
ETP Risk Warning
ETPs can use complex financial techniques, meaning that these types of products may not be suitable for all investors. The value of an ETP is not guaranteed and can go down as well as up and you may get back less than you invested. If you are unsure of their suitability please seek independent financial advice. The protections available under the Financial Services Compensation Scheme (FSCS) may not be available for all types of ETPs domiciled outside of the UK.
Before you invest in an UCITS ETF you should make sure that you read the Key Investor Information Document (KIID) and Key Features Document (KFD) or other supporting information. For other types of ETP you should make sure that you read the Prospectus for the ETP you are intending to invest in, to make sure that it fits in with your investment goals. In addition, other information might be available like a fact sheet.
More risk information
The documented risks below are not intended to be an exhaustive list associated with ETPs, however, documents the more common risks associated with these types of products.
Stock lending (collateral)
Other important ETP information
What’s the difference between physical and synthetic ETPs?
Why trade in Exchange Traded Products?
Key Investor Information Document (KIID)
Which account should I choose to invest in ETPs?
Where can I find more information?