Investors got a reminder of this risk last week when Lehman Brothers filed for bankruptcy. Barclays has said the purchase of Lehman assets will not include any of the bankrupt bank’s debt, which would include these products. While investors may get some return through bankruptcy proceedings, it is likely to be pennies on the dollar, analysts say.
ETN enthusiasts are sticking to their stories, however, and the commitment remains, especially with the access to commodities, and hard-to-reach areas of the market that help with diversification. New ETN product launches are not expected to be canceled, just put on hold.
Overall, one ETF researcher says that keeping confidence in the ETN market strong will just take stepped-up education efforts. Providers of ETNs that are already on the market remain committed to their products.
Some of the largest ETN providers include:
- Barclays, $5.2 billion
- Swedish Export Credit, $551 million
- Deutsche Bank, $431 million
- UBS, $130 million
