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Flux
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Flux
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What are the risks of investing in a stock tracker ETP?

Just a few days ago (2021-05-26), the first "stock tracker ETPs" were listed on the London Stock Exchange, Euronext Amsterdam, and Euronext Paris. These instruments track the price of US-listed stocks. Refer to this article from the company that launched these products: World's First Stock Tracker ETPs. What are the risks of investing in such products (relative to owning the underlying shares outright)?

In particular, I am concerned about the possible tracking errors. What are the sources of tracking errors for these exchange-traded products? What would happen to the tracking stock if the fund management company goes bankrupt?