The structure of the ETF
There are two main types of ETF available. Physical ETFs, which use assets to track the underlying market, and synthetic ETFs which use derivatives. Both have advantages and limitations which you should consider before taking a position.
For example, physical replication makes it easier to see what you are invested in and is generally considered less risky than synthetic replication. However, there are some markets where physical replication is impossible or hugely inefficient. In which cases, synthetic replication provides exposure to markets that would be otherwise unavailable.
