Exchange-Traded Note (ETN)
Also called: ETN, exchange traded note
An ETN is an unsecured debt obligation of a bank that promises the return of an index, rather than a fund that owns assets. It tracks perfectly by construction, which is its appeal for hard-to-hold exposures like volatility or commodities — and it carries the issuer's credit risk, which is its defining danger. If the bank fails, you're an unsecured creditor regardless of how the index performed; Lehman's ETNs proved the point.