Exchange traded products (ETPS)
Some are riskier than others
Exchange traded products (ETPs) are investments that can be
bought and sold on an open market, such as the ASX. There are lots
of new exchange traded products available to retail investors, with
varying degrees of risk and complexity.
Most are relatively easy-to-understand, however some can be
quite complex. Here we explain the differences between different
types of ETPs.
In Australia, exchange traded products are quoted on the ASX
listing market or the ASX Quoted Assets (AQUA) market.
Products that are traded on the AQUA market are issued by a
third party, giving investors exposure to the underlying assets,
without owning those assets. The issuer does not have control over
the assets it's tracking, but the value of the fund is linked to
the performance of the underlying assets.
The AQUA market offers trading at net asset value (NAV) in
products such as:
- ETFs (including synthetic ETFs)
- Structured products
- Exchange traded managed funds (including exchange traded hedge
Products quoted on the AQUA market must contain labels such as
'synthetic' or 'collateralised' in their title, where
Similar products listed on the ASX listing market may not comply
with the same AQUA market listing requirements.
Types of exchange traded
Here are the different types of exchange traded products:
- Exchange traded funds
(ETFs) - A type of managed fund that can be a low-cost way
to get investment returns similar to a share index or another
- Synthetic ETFs -
A type of managed investment that can be bought or sold like
shares. It uses complex products like derivatives to achieve
investment objectives such as replicating returns on an index.
- Other exchange traded
products - Other products traded on the ASX AQUA market that
can be riskier than ETFs. They include structured products,
exchange traded managed funds and exchange traded hedge funds.
Before investing in these products, read the disclosure
documents for further information about the specific features of
each product, and consider getting professional financial
You can also complete one of the ASX's free online courses on exchange traded funds
(ETFs) and exchange traded products (ETPs)
There are many different types of exchange
traded products, varying in risk and complexity. Seek financial
advice if you are not sure if this type of investment is right for
Last updated: 10 Feb 2017