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., Index Fund vs. ETF: An Overview Index funds and exchange-traded funds (ETFs) have revolutionized investing over the past few decades, offering low-cost ways for individuals to gain broad market , Index fund vs. ETF: Major similarities. Despite the technical differences between index funds and ETFs, they're similar in many ways. Simple to manage. With both index funds and ETFs, you make just one purchase to buy into a large professionally managed portfolio. You don't need to buy all of the components of the portfolio individually..