Exchange-Traded Note (ETN)

An Exchange-Traded Note (ETN) is a type of structured financial product issued as a senior debt note, distinguishing it from exchange-traded funds (ETFs) that provide direct ownership of an underlying asset. ETNs are essentially unsecured and bear resemblance to bonds. Introduced by Barclays Bank in 2006, ETNs were designed to enable regular investors to invest in traditionally illiquid and difficult-to-access assets. Unlike ETFs, which involve the direct purchase and sale of assets, ETNs offer potential tax advantages for long-term investors as taxes are triggered only when the fund is sold.