They are structured as open-end funds which are domiciled and registered in many countries. The assets of ETFs are held by custodians in a ring-fenced structure.
Most ETFs purchase the underlying securities in the index with the majority fully replicating their underlying index; many have the capacity to employ optimisation and sampling techniques. These ETFs may exclude certain securities and deviate from their benchmark constituent weights, which could lead to tracking error.
The week on Risk.net, December 2–8, 2017Receive this by email