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Similar to stocks, exchange-traded funds (ETFs) are open-ended funds listed and traded on stock exchanges. Broadly speaking, ETFs fall into two categories: passive or active.

Passive ETFs aim to track an underlying index, which can be a stock market, a group of regional or global stock markets, or an industry sector. The underlying index can also track other assets such as bonds or commodities. Passive ETFs are also called index tracking ETFs.

Active ETFs do not track any underlying index but seek to achieve a stated investment objective by investing in a portfolio of stocks, bonds, and/or other assets such as money market instruments. The underlying assets of an active ETF are usually actively managed by a portfolio manager with an aim to outperform the market or a benchmark.

You should read the fund's offering document and product key facts statement. They will give details about the investment goals, index-tracking strategy (where applicable), risks, fees and procedures.

To learn more, see the following sections.

(Note) Unless otherwise specified, the term “ETF” used in this website shall cover SFC-authorized active ETF, passive ETF and listed unit/share class of an unlisted fund


Basics

Key features
ETF versus unlisted funds
Offering documents
Information sources
Securities financing transactions for ETFs
Multiple Counter Model for ETFs
List of ETF
ETF with an unlisted unit/share class

Tracking strategies (for passive ETF)

Types of tracking
Tracking difference and tracking error

Benefits and risks

Key benefits
Major risks

Synthetic passive ETF

Identification by marker
Identification of annotation
Website disclosure
Funded swap
Unfunded swap
Performance-linked access products

Other types of passive ETF

Precious metal ETF
Futures-based ETF
Crude oil futures ETF