So far, this has been the year of the exchange traded note (ETN). Investment banks and fund providers have been lining them up in the market in droves.

But how come investors haven’t been lining up in droves to buy them? Most ETNs have fewer than $100 million in assets: 78 of the 89 available ones fall under that mark. The ETN marketplace collectively has $7.2 billion, however.

Ian Salisbury for the Wall Street Journal says there could be a number of possible reasons, including credit risk, complex strategies and remaining uncertainty about their tax status.

Their primary advantage is that they offer investors access to hard-to-reach areas, such as India and currencies. But some wonder if it’s just a case of too much product competing for investor attention.

Another problem is that these days, investors might be wary of the term “credit risk.” If an ETN issuer goes out of business, the investor faces a loss. And the credit crunch hasn’t inspired much confidence in the financial stability of some institutions.

When ETNs were first launched, their tax status was touted as a major advantage. But last year, the government did away with the advantages for foreign currency ETNs, and is currently weighing how they will handle other types.

We think that these issues and others are likely coming in to play. Since most of these funds have launched in the last six months, the market has been challenged in general and there’s not a lot of new money out there. Those investors who are looking for commodity exposure are likely putting their money in funds that have been established longer.

Make no mistake: there is risk, as with anything else. However, we keep in touch with providers, and we feel certain of their financial stability. When the market turns around once again, perhaps these interesting products will begin to capture the attention of more investors.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.