Sponsored statement: HSBC

Investors familiar with equity markets often use turnover as an indicator of liquidity even when investing in exchange-traded funds (ETFs), but Keith Chan at HSBC explains why with ETFs this can be a common mistake to make

Keith Chan, Director, Head of Listed Product Sales at HSBC, says that it is important to educate investors that although a specific exchange-traded fund (ETF) shows low turnover volume, it does not mean it is illiquid.

The real indicator of liquidity for an ETF is the liquidity of the underlying constituents. As long as the underlying stocks for an equity ETF, for example, operate in liquid