ETFs, ETCs and ETPs Explained: Understanding the Different Investment Products

What are ETPs?

ETPs (exchange-traded products) are investments traded on stock exchanges that provide access to different asset classes, such as equities, bonds or commodities, through a single investment.

ETPs typically:

• Are traded during market hours
• Can be bought and sold like shares
• Provide access to different markets and asset types

ETFs, ETCs and other ETPs: what’s the difference?

ETP is an umbrella term covering several types of exchange‑traded investments.

• ETFs (exchange-traded funds) Typically invest in a basket of assets, such as shares or bonds, and are commonly used for diversified investing.
• ETCs (exchange-traded commodities) Aim to track the price of a single commodity, such as gold, oil or wheat.
• Other ETPs Some track the price of a single asset, such as a digital asset, rather than a group of investments.

While they share similar trading features, they differ in their structure depending on what they aim to track.

In short: ETPs are a broad category of exchange-traded investment products.

Let’s look at some of the most common types of exchange traded products, starting with ETFs.

Equity ETFs

Equity ETFs invest in many companies within a single fund, often covering different sectors and themes. This helps spread risk and reduce the impact of individual company performance.They can be used to target different parts of the market, such as:

• Broad markets – such as different countries worldwide
• Regional or country specific markets – such as US equities
• Specific sectors – such as technology or healthcare
• Specific themes – such as AI and space technology

Equities are often considered a core component of a portfolio, offering potential for higher returns over the long term compared to bonds.

In short: Equity ETFs provide growth potential with diversification.

Diversification does not fully protect against market risks.

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed.

Bond ETFs: Focus on income and stability

Bond ETFs, also known as fixed income ETFs, invest in many bonds. Bonds are loans to governments or companies. In return, investors typically receive:

• Regular interest payments
• Repayment of initial investment at maturity (depending on structure)

Investors often use Bond ETFs to:

• Supplement income
• Plan for future cash needs
• Add stability to a portfolio

For these reasons, investors may choose to combine equity and bond ETFs to balance growth, income potential, and diversify risk.

Learn more about fixed-term bond ETFs

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed.

Commodity ETCs: Access to physical assets

ETCs (exchange-traded commodities) track the price of a single commodity, such as gold or oil, without requiring physical storage.

Their prices are driven by supply and demand and have historically tended to rise alongside inflation, which means they do not always move in line with traditional investments like stocks and bonds.

For this reason, investors may use commodities to diversify their portfolios and help protect against inflation.

Learn more about commodity ETCs and how to invest

Commodity prices tend to fluctuate more than other asset classes. Investing in commodities can be associated with higher risks.

Multi-asset ETFs: Multiple asset classes in one product

Multi-asset ETFs combine different asset classes, such as:

• Equities
• Bonds
• Commodities

Many investors use multi-asset ETFs for simplicity, since they offer diversified exposure to multiple asset classes within a single investment.

Diversification does not fully protect against market risks.

Thematic ETFs: Investing in long-term trends

Thematic ETFs focus on specific trends or long-term developments.

Examples include:

• Artificial intelligence
• Sustainability
• Demographic change
• Digitalisation

Learn more about AI ETFs and how to invest

Digital asset ETPs: Access to cryptocurrencies

Digital asset ETPs track the price of cryptocurrencies, such as bitcoin, and other digital assets. They allow investors to gain exposure without needing to own or store these assets directly.

They can help investors:

• Access crypto markets through a familiar, exchange traded structure
• Avoid managing wallets and custody
• Simplify some of the operational and tax complexities of holding digital assets directly

However, it is important to note that digital asset ETPs carry the same market risks as the underlying cryptocurrencies, which can be highly volatile.

In short: digital asset ETPs provide a more accessible way to invest in cryptocurrencies through the stock exchange.

Learn more about crypto ETPs

Capital at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong.