Tips on risk avoidance and ETF selection criteria

First of all, she said, it is essential to differentiate between ETFs, which are UCITS-regulated funds, and other exchange-traded products such as ETNs, ETPs, ETCs, which do not stick to the same set of guidelines in terms of index structure methodology, diversification ratios, counter-party risk disclosure requirements nor documentation. Baudson went on to explain to the Edhec-Risk Institute that as with any investment product, ETFs are not immune to exposure to certain risks and it is incumbent upon providers to disclose these in full to their clients. She said that there have been rec...