atans1

An Exchange Trade Note is not an ETF

In ETFs, Financial competency on 31/03/2012 at 11:14 am

 [T]he buyer of the exchange traded note takes on its investment risk along with a big barrel full of counterparty risk, too. And perhaps some market or liquidity risk as well, as we’ve seen in recent days.

In short, an exchange traded note can be seen as a total return swap, sold to retail investors, that lacks all of the regulatory innovations that have developed over the past few years.

http://dealbook.nytimes.com/2012/03/29/the-trouble-with-exchange-traded-notes/?nl=business&emc=edit_dlbkpm_20120329

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