All investment carries risks, and ETFs come with specific risk factors that you need to be aware of. These include:
Liquidity risks: Although most EtFs are liquid with additional liquidity from market makers, some ETFs do not benefit from this and can face liquidity risks during volatile markets.
Legislative & regulatory risks: Potential changes introduced by governments or regulators can impact the value of securities held within the ETF.
Counterparty risks: Some ETFs employ over-the-counter (OTC) derivatives which could expose you to higher count xparty risks.
Taxation treament: Taxation for ETFs can be different from that of shares. We recommend consulting a taxation adviser to align with your own financial circumstances.