Although ETFs can be regarded -- particularly over the medium to long-term -- as low risk investments, these are still based on shares or securities, therefore do inherently carry the risks associated with trading in any securities exchange.
ETF securities will rise and fall in value according to market changes. As with unit trusts and most investment vehicles, ETFs are not capital protected therefore, depending on market movements during your investment period, you are not guaranteed to get back your full investment when you decide to cash it in.
Particular risks include:
• General market risks
• Interest rate risks
• Exchange rate risks
• Inflationary risks
• Liquidity risks
• Legal and regulatory risks