Get started with ETNs
What are ETNs?
Exchange-Traded Notes (ETNs) allow you to gain exposure to the performance of an underlying index or asset class. They are debt securities issued by a financial institution (the issuer), which you can trade through your investment account.
ETNs can provide access to markets or asset classes that may be difficult to invest in directly, helping to diversify a portfolio by offering exposure to assets that may behave differently from other investments, without holding the underlying assets directly.
However, in addition to being exposed to the credit risk of the issuer, ETNs can sometimes experience high volatility and limited liquidity. You should be aware of these risks before investing.
What is the difference between an ETF and an ETN?
While some ETNs and ETFs may aim to track the same index or group of assets, they are fundamentally different instruments. ETNs are debt securities issued by a financial institution, not funds that hold assets.
When you invest in an ETN, you are lending money to the issuer which means you are exposed to the issuer’s credit risk. If the issuer cannot meet its obligations, you may lose some or all of your investment, even if the underlying asset performs well.
Some ETNs may be leveraged and/or inverse and carry higher risk. Read more about these in this FAQ.
Do ETNs pay out dividends?
ETNs typically don’t pay out dividends.