A new exchange traded note (ETN) provider has popped up: WealthNotes, from Westport, CT. Their first offering is a play on the 130/30 strategy.

So far in 2008, the ETN industry has been outpacing the ETF one in terms of launches. ETNs are similar to ETFs in that they both track an index and are traded on major U.S. exchanges. ETNs have no tracking error, and are actually debt instruments that assume the risk that the provider might not be able to pay when the time comes.

The latest ETN from WealthNotes tracks the S&P 500 130/30 Total return Strategy Index, and will trade on the NYSE Arca under WNF.

The 130/30 strategy uses financial leverage by shorting poor performing stocks and buying stocks that are anticipated to have high returns. As the name implies, 30% of the portfolio value can be shorted while using the long position to focus on the stocks that will outperform, Investopedia says.

WelathShares is jumping into the ETN pond with other providers are already wading in it, including iPath, UBS E-TRACS, and Rogers ELEMENTS.

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.