So, is it risky to buy ETF funds? The answer is yes. Any investment has risks, and ETF funds are no exception. The risks of ETF funds mainly include market risk, operational risk and liquidity risk.
The first is market risk. The price of ETF fund is closely related to the price of the index it tracks or the underlying assets. If the market fluctuates greatly, the price of ETF funds will also fluctuate accordingly. This means that if investors buy ETF funds when the market falls, they may face greater losses. Therefore, investors should fully understand the market conditions and risks of the tracked index or underlying assets when purchasing ETF funds.
The second is operational risk. ETF funds are traded in a similar way to stocks, and investors need to buy and sell through securities accounts. Operational risks mainly include transaction errors and transaction costs. Investors should pay attention to the choice of formal securities companies and the control of transaction costs when trading ETF funds.
Finally, there is liquidity risk. The liquidity of ETF fund depends on the index it tracks or the liquidity of the underlying assets. If the liquidity of the tracked index or underlying assets is poor, the liquidity of ETF funds will also be affected. This means that when the market fluctuates greatly, investors may face the situation that ETF funds cannot be redeemed in time.
In short, buying ETF funds is risky, but the risk is not terrible. As long as investors fully understand the market conditions and risks of ETF funds they invest in, and take corresponding measures to control risks, they can avoid risks and gain profits. At the same time, investors should choose according to their own risk tolerance and investment purpose, and don't blindly follow the trend or excessively pursue high returns.