Index tracking exchange-traded fund (ETF)
ETFs are funds you can buy and sell via stock exchanges, similar to buying stocks. The investment goal is to track the underlying index. This can be a stock market, a group of regional or global stock markets, or an industry sector. The index can also be bonds or commodities.
A Hang Seng Index ETF, for example, its investment objective is to track Hong Kong's Hang Seng Index.
Some ETFs track the underlying index by buying the index's stocks. Others use derivatives to do so.
You should read the fund's offering document and product key facts statement. They will give details about the investment goals, index-tracking strategy, risks, fees and procedures.
To learn more, see the following sections.