ETP | Spotlight

ETPs

ETPs, or Exchange Traded Products, are a collective term for securities listed on the stock exchange whose value follows an underlying asset. The underlying asset provides an investor access to a variety of different assets, such as an index, a commodity, or a cryptocurrency. How an ETP follows the underlying asset depends on the type of ETP it is. Examples of ETPs include Tracker Certificates, Warrants, Mini Futures, and Bull & Bear Certificates. ETPs can be traded through exchange members and can be held in accounts such as ISKs (Investment Savings Accounts) and Capital Insurance. ETPs have a market maker who ensures that buy and sell prices are quoted during the stock exchange's opening hours, allowing an investor to buy or sell back the certificate.

Credit Risk

Keep in mind that as an investor, you are taking on the credit risk of the issuer of the security, similar to how a stock purchase involves taking on the credit risk of the company.

Currency Risk

If the underlying asset is listed in a different currency, a currency risk also applies. This means that the exchange rate affects the value of the ETP, in addition to market developments, and can be both positive and negative. For example, even if the value of the underlying asset increases, the value of the ETP can decrease if the exchange rate has a negative impact. Some ETPs have built-in currency hedging, which will be specified in the final terms.

Tracker Certificate

A tracker certificate is a security that tracks the underlying asset, rising and falling by the same percentage as the underlying asset. A tracker certificate is similar to an exchange-traded fund (ETF) but has an issuer who issues and guarantees the certificate. Tracker certificates have a management fee that the investor pays, which can vary between different certificates and is described in the certificate's final terms.