Course 402: Alternative Investments
Exchange-Traded Notes (ETNs)
In this course
1 Introduction
2 Exchange-Traded Funds (ETFs)
3 Exchange-Traded Notes (ETNs)
4 Unit Investment Trusts (UITs)

It sounds similar to an ETF but is actually quite different. An ETN essentially is a promissory note from a financial institution to match the return of an index, minus fees. Like a bond, it has a maturity date, and like an ETF it can be traded throughout the day. The danger here is that an ETN is an unsecured obligation, meaning that if the financial institution issuing it can't meet its obligations, assets invested in the ETN may be lost. For that reason investing in an ETN entails a degree of credit risk along with the risk inherent in the performance of the index it tracks.

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