Exchange-traded products (ETPs) are subject to market volatility and the risks of their underlying securities, which may include the risks associated with investing in smaller companies, foreign securities, commodities, and fixed income investments. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets. ETPs that target a small universe of securities, such as a specific region or market sector, are generally subject to greater market volatility, as well as to the specific risks associated with that sector, region, or other focus. ETPs that use derivatives, leverage, or complex investment strategies are subject to additional risks. The return of an index ETP is usually different from that of the index it tracks because of fees, expenses, and tracking error. An ETP may trade at a premium or discount to its net asset value (NAV) (or indicative value in the case of exchange-traded notes). The degree of liquidity can vary significantly from one ETP to another and losses may be magnified if no liquid market exists for the ETP's shares when attempting to sell them. Each ETP has a unique risk profile, detailed in its prospectus, offering circular, or similar material, which should be considered carefully when making investment decisions., Discover the key differences between index funds and ETFs, including fees, trading, and tax efficiency, to decide which investment best fits your financial goals., ETF vs. index fund: Key differences The differences between an ETF and an index fund depend on how you define each of those terms. In this article, we're considering an ETF to be a passively managed fund that attempts to mimic the performance of an index, like the S&P 500 ®. And we're considering an index fund to be a mutual fund that also tracks an index. Really, an index fund could be a .