Dr Wise on Index Tracking Exchange Traded Funds

The latest Dr Wise’s Column reminds investors that the trading price of an index tracking exchange traded fund (ETF) may differ from its underlying net asset value.

The SFC today publishes the July issue of Dr Wise’s Column, “Investing in Index Tracking Exchange Traded Funds”, on its InvestEd website at www.InvestEd.hk.

ETFs in Hong Kong are listed collective investment schemes that aim to track an index efficiently. Like other stocks listed on the Stock Exchange of Hong Kong, ETFs carry similar risks such as liquidity risk and the possibility of trading suspension. Investors should also note that the performance of an ETF may not closely match its underlying index and its trading price may deviate from its net asset value. It is important for investors to fully understand the nature and salient features of an ETF, its underlying index/market and strategy before investing.

Dr Wise is a fictitious character. Through his column, he talks to investors about the key issues of investing and regulatory thoughts.

Dr Wise’s Column is published on the last working Tuesday of every month. From time to time, additional articles in the form of special issues may be published on topical matters. The column is posted under the “Features & Dr Wise” section of the InvestEd website. Investors are welcome to send their feedback and questions to Dr Wise by email to InvestEd@sfc.hk.

Ends

Notes:

1. News media are welcome to carry the column with acknowledgement of the source of the information.