Due to recent market condition, investors have been placing increasing emphasis on identifying and quantifying counterparty risk- the risk associated with the issuer of the product.

ETFs are mutual funds and as such do not have issuer-related risk. They can however, but derivatives, enter swap agreements for the fund and lend securities. therefore there can be counterparty risk, the risk that the issuer of the derivatives fails to repay the capital or return when due - this will reduce the investors' return regardless of the performance of the underlying  assets.