Two products can have the same name and track the same index and still give you different rights. The legal form decides who owes you what.
Education, not advice. Nothing here recommends buying or selling any fund. Past returns are not used to rank anything. Funds can lose value, and some products carry the credit risk of their issuer.
TypeWhat backs itLegal formMain extra riskTypical use
UCITS ETF, physical
The fund's securities
Fund with assets kept apart from the issuer
Tracking difference and fund closure
World and US stock funds
UCITS ETF, synthetic
A swap with a bank, plus a basket of assets
Fund with assets kept apart from the issuer
Counterparty risk on the swap
Some index funds
ETC
A debt security tied to a commodity
Debt security, not a fund
Issuer risk, and roll costs if futures-based
Gold and commodity products
ETN
A promise by the issuer to pay an index return
Debt security, not a fund
Credit risk of the issuer
Some crypto and thematic products
US trust or ETF
Securities, metal or a digital asset held by a trust
US-domiciled vehicle
Often not available to EEA retail clients
US stock and spot Bitcoin ETFs
A UCITS fund keeps its assets separate from the issuer's own balance sheet. If the issuer fails, the fund assets are still the fund's. A physical fund holds the securities. A synthetic fund holds a basket and a swap with a bank, so it depends on that bank honouring the swap. UCITS rules limit this counterparty exposure; read the fund's documents for the figure.
An ETC or an ETN is a debt security issued by a company. It tracks a price, but you are lending to the issuer. Some are backed by metal or by collateral, which reduces the risk without removing it. Read who holds the backing and how it is checked.
US-listed funds and trusts follow US rules. Many are not offered to retail clients in the EEA because they lack the required disclosure document. Your broker shows what you can buy.
Tax depends on your country and on the product type. It is not covered here and this is not tax advice.
Questions people ask
Is an ETC safe because it holds gold?
Not entirely. It is a debt of the issuer, backed by gold. Read how the gold is held and checked.
What is the safest form?
No form is risk-free. A UCITS fund keeps assets separate, which removes issuer risk for the assets, not market risk.
How do I see the form of a product?
In its key information document and prospectus, on the issuer's website.