The goal of an ETF is to track a specific market index. Sometimes, though, tracking error can occur when an ETF does not perfectly mimic the returns of its reference index. This can result in big price differences; both positive and negative for the investor. Some small level of tracking error is normal in all ETFs, however, and should be expected.
ETFs on overseas markets can also be exposed to currency risk. Although ETFs can give investors access to these hard-to-reach markets, this means some ETFs can be priced in different currencies. Again, currency risk can have upsides as well as downsides – depending on movements in the foreign exchange market.
Fortunately, in the unlikely event an ETF provider did go bust, its assets by law will have been ring-fenced and held by a separate custodian – meaning no money, apart from agreed charges, can be misappropriated out of the ETF.