ETFs (Exchange Traded Funds) and equities | HSBC

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Equities and ETFs

What are ETFs and Equities?

Antique clock and other items

Equities1 represent ownership stakes in corporations. Typical equities may include common stock, preferred stock, foreign equities and closed-end funds.

An ETF, or Exchange Traded Fund2, is a collection of assets (like an index fund3) of equities, commodities, and/or bonds that is bought and sold like a stock in real-time on a stock exchange. Most ETFs are not actively managed, but instead are designed to track an index. In general the expense ratios of ETFs are relatively low. Because it trades like a stock, an ETF does not have its net asset value (NAV) calculated every day like a mutual fund does.

Both equities and ETFs can offer potential growth from market price appreciation; however, they are subject to market volatility and thus, open to market price risk and potential loss of principal.

Ready to invest?

Before you invest in equities or ETFs, it's important to weigh the risks against the potential returns and carefully plan your strategy. In addition to utilizing the knowledge and support of your HSBC Securities Financial Advisor, you can leverage unique insights and analysis from HSBC's vast global resources to help you evaluate your investment possibilities. Get started with a complimentary and comprehensive financial review by calling us at 866.586.4722 or by scheduling a consultation online.

1 Equity securities include common stocks, preferred stocks, convertible securities and mutual funds that invest in these securities. Equity markets can be volatile. Stock prices rise and fall based on changes in an individual company's financial condition and overall market conditions. Stock prices can decline significantly in response to adverse market conditions, company-specific events, and other domestic and international political and economic developments.

2 Exchange-traded funds are subject to risks similar to those of stocks. Investment returns will fluctuate and are subject to market volatility such that an investor's shares, when redeemed or sold, may be worth more or less than their original cost. Unlike mutual funds, shares of ETFs are not individually redeemable directly with the ETF but must be bought and sold on an exchange like an individual equity or bond.

3 Stock index funds are passively managed funds, which attempt to replicate the performance of a specific stock market index by investing in the stocks held by that index.

Investment and certain insurance products, including annuities, are offered by HSBC Securities (USA) Inc. (HSI), member NYSE/FINRA/SIPC. In California, HSI conducts insurance business as HSBC Securities Insurance Services. License #: OE67746. HSI is an affiliate of HSBC Bank USA, N.A. Third party whole life, universal life and term life insurance products are offered through Insurance Agents of HSBC Insurance Agency (USA) Inc., which is a wholly-owned subsidiary of HSBC Bank USA, N.A. Products and services may vary by state and are not available in all states. California license #: OD36843.


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