Today as we know there are many ETFs on emerging markets e.g. China, India, Brazil, South Korea etc. Let's talk about those ETFs on the China markets. I know they can't trade directly in the China markets (A shares) except in Hong Kong (H shares). From what I know they are only involved themselves in the derivatives products outside China and not shares directly.

Question: What are the risks as far as private investors are concerned when they buy ETFs? What they (ETFs) are holding are "contracts" with third parties and what will happen if those third parties failed and not be able to fulfill those outstanding contracts.

I know most ETFs don't pay dividends and this appears to me is private investors are real suckers as ETFs managers are using private investors money to make fat bonuses for themselves and not distributing profits to private investors.

Your opinions are appreciated on this subject.