ETFs, in general, involve greater risk (in addition to) than the underlying equity.  In Singapore, average consumers (those without a background, or higher degree in Finance)  are not allowed to purchase (even through their broker) an ETF without first having taken a series of course material, and exams.  (pretty good idea if you ask me).<p>From the course, they highlighted synthetic replications risks as consisting of credit risk of the counterparty when swaps are used by the issuer to exchange, performance of the assets held by the ETF for the performance of the underlying index.  Blackrocks&#x27; IVV [1] has a cost structure of 0.07%, which is pretty good - and does an extremely good job of tracking the S&amp;P500.  It uses, &quot;Representative Sampling&quot; - from their prospectus [2] <i>BFA uses a representative sampling
indexing strategy to manage the Fund.
“Representative sampling” is an
indexing strategy that involves investing
in a representative sample of securities
that collectively has an investment
profile similar to that of the Underlying
Index. The securities selected are
expected to have, in the aggregate,
investment characteristics (based on
factors such as market capitalization
and industry weightings), fundamental
characteristics (such as return
variability and yield) and liquidity
measures similar to those of the
Underlying Index. The Fund may or may
not hold all of the securities in the
Underlying Index.</i><p>[1] <a href="https:&#x2F;&#x2F;www.ishares.com&#x2F;us&#x2F;products&#x2F;239726&#x2F;ishares-core-sp-500-etf" rel="nofollow">https:&#x2F;&#x2F;www.ishares.com&#x2F;us&#x2F;products&#x2F;239726&#x2F;ishares-core-sp-5...</a><p>[2] <a href="https:&#x2F;&#x2F;www.ishares.com&#x2F;us&#x2F;library&#x2F;stream-document?stream=reg&amp;product=I-SP500&amp;shareClass=NA&amp;documentId=925833~926358~926348~925661~925593&amp;iframeUrlOverride=&#x2F;us&#x2F;literature&#x2F;prospectus&#x2F;p-ishares-core-s-and-p-500-etf-3-31.pdf" rel="nofollow">https:&#x2F;&#x2F;www.ishares.com&#x2F;us&#x2F;library&#x2F;stream-document?stream=re...</a>