Jump to content
  • 0

What are the differences between ETF and ETN?


Kelvin
 Share

Question

1 answer to this question

Recommended Posts

  • 0

Hello Kelvin,
Exchange-traded funds are close counterparts to exchange-traded notes. However, these two have some major differences between them.
Investors should, therefore, study both of them critically and understand their pros and cons before deciding on what they will invest.
Exchange-traded funds are a market-linked investment that is provided as a senior note or debt. ETF, on the other hand, portrays interest in a fundamental asset.
ETN are usually not secured, which is why they perform just like bonds. ETF investments are taken into a fund that carries the properties it traces just as it does with stocks and bonds.
ETN has credit risk, while ETF, on the other hand, roughly lacks credit risk. However, ETF posses tracking risk, which means that the returns of ETFsand its underlying asset will probably differ.
In terms of tax treatment, ETN pursues its essential indexes less their annual expense. Different from ETF, ETNs do not track errors.
Stockholders should view ETN as liquidated agreement. Therefore the differences in buying and selling should be taken as capital gains.
ETN result from long-term capital gains and should, therefore, have a more favorable tax treatment in contrast to ETF that result from short-term capital gains.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. To reply to this question, sign in or create a new account.

Guest
Reply to this question

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share

×
×
  • Create New...