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Exchange-traded note (ETN)

An ETN is an unsecured debt obligation designed to pay a return linked to an index or strategy, subject to the issuer's creditworthiness and the note's terms.

By Betta Signals Research Desk · Reviewed October 24, 2026

Plain-English definition: An ETN is an unsecured debt obligation designed to pay a return linked to an index or strategy, subject to the issuer's creditworthiness and the note's terms.[1]

How the term is used

An ETN can trade on an exchange like an ETF, but it does not necessarily hold a portfolio of the referenced assets. The investor has a claim on the issuer under the note contract.[1]

What to check before relying on it

Review issuer credit risk, maturity, call provisions, indicative value, trading liquidity, fees, tax treatment, and any difference between market price and indicative value.

Example

Even when the linked index rises, an ETN holder still faces the risk that the issuing bank cannot meet its obligation or calls the note under its terms.

Exchange-traded fund (ETF)BondIndex

Research last reviewed: October 24, 2026. This definition is educational and does not evaluate a particular security.

Sources

  1. FINRA: Exchange-Traded Funds and Products — ETF and ETP structure, trading, costs, and product-specific risks. Accessed October 24, 2026.