Common use of EXCHANGE TRADED FUND Clause in Contracts

EXCHANGE TRADED FUND. An index tracking exchange traded fund (ETF) is traded on an exchange. Its principal objective is to track, replicate or correspond to the performance of an underlying index. The index can be on a stock market, a specific segment of a stock market or a group of stock markets in a region or elsewhere in the world. It can also be on bonds or commodities. Synthetic ETF is a kind of ETF, which fund managers adopt synthetic replication through investing in financial derivative instruments, such as swaps and performance-linked notes, to replicate the index performance. CHARACTERISTICS

EXCHANGE TRADED FUND. An index tracking exchange traded fund (ETF) is traded on an exchange. Its principal objective is to track, replicate or correspond to the performance of an underlying index. The index can be on a stock market, a specific segment of a stock market or a group of stock markets in a region or elsewhere in the world. It can also be on bonds or commodities. Synthetic ETF is a kind of ETF, which fund managers adopt synthetic replication through investing in financial derivative instruments, such as swaps and performance-linked notes, to replicate the index performance. CHARACTERISTICSCHARACTERISTICS 1 Exchange trading An ETF is structured as a mutual fund or a unit trust but its units, like a stock, are also tradable on The Stock Exchange of Hong Kong.