What is Exchange-Traded Note (ETN)?

An exchange-traded note (ETN) is a structured financial product that is issued as a senior debt note, and stands in contrast to exchange-traded funds (ETFs) which represent a direct stake in an underlying asset. In other words, ETNs are unsecured and similar to bonds. ETNs were developed in 2006 by Barclays Bank in order to make it easier for normal investors to invest in traditionally illiquid, hard-to-access assets. Because ETNs don't involve the direct buying and selling of assets like an ETF, investor taxes are not triggered until the fund is sold, which can be advantageous for long-term investors.