Trading term
What is ETN (exchange-traded note)?
An ETN is a debt note from a bank that trades like a share and pays the return of an index. It doesn't hold any assets for you.
An ETF owns things on your behalf. An ETN is a promise. The bank that issues it owes you the index's return, minus a fee, so you take on the risk that the bank can't pay. ETNs trade on an exchange all day, and the issuer can sell new notes to keep the price close to the note's real value.
For example
VXX is an ETN from Barclays that follows an index of VIX futures. It holds no futures for you. Barclays owes you what the index returns, less a 0.89% yearly fee.
Go hands-on in Premium
That's ETN (exchange-traded note) in theory — it clicks when you read it on a live chart. Practise it hands-on in the TradeWize Premium Futures & Derivatives track.
Explore Premium →Why it matters to you
An ETN can look identical to an ETF on a quote screen, but the risks differ. If the issuer fails, you're a creditor. If the issuer stops selling new notes, the price can drift away from the note's value.
⚠ Treating an ETN like a fund
On 14 March 2022 Barclays stopped issuing new VXX notes and warned they could trade away from their value. It restarted on 26 September 2022.