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Exchange traded funds (ETF) and Exchange traded notes (ETN) are derivatives underlying investment assets (stocks, indexes, commodities etc.). Issuer are big investment banks.

ETF represents in fact ownership for underlying assets. Therefore especially big institutional holders could and also do asking to redeem their ETF position for underlying stocks. This makes ETF price staying closely along underlying stocks. For example this is not the case for Closed end funds - CEF.

Contrary ETN is kind of structured product issued as a debt note. And that's why credit risk is here. Of course nobody really expect Barclays' goes bankrupt. ETN are lack of tracking risk. It means that price exactly reflects underlying index. ETF can differ from NAV.

Difference between ETF and ETN.

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