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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?

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Where do you check the tracking errors for traditional ETFs?

From what I see the ETP is physically backed - and the underlying assets are held with an independent trustee, so this should not be an issue (this is the advantage of holding ETPs instead of certificates actually). So even if the issuing company goes under, the trustee can liquidate the assets and return the cash to investors.

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  • An ETF's tracking error is sometimes mentioned in the fund's factsheet.
    – Flux
    Jun 28, 2021 at 20:11
  • Hmm ok, I haven't checked for this to be honest.
    – user110236
    Jun 30, 2021 at 7:19

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