6.4  Exchange-Traded Notes

Exchange-traded notes (ETNs) are unsecured debt usually issued by a bank that promises to pay an amount based on the performance of an index, minus fees. Unlike other debt securities, however, ETNs do not pay interest. They also do not offer principal protection.

Because ETNs are debt securities, investors do not have a claim to any securities. Instead, investors loan the issuer a certain amount of money and receive a promise from the issuer to repay their loan at a future date, based on the performance of the index being tracked. So investors who hold their ETNs to maturit