Additionally, ETNs may issue some hidden fees investors are not aware of, which may lead to tracking errors, or deviations in ETN performance, to the underlying index. [Morningstar Warns on ETN Fees]
For instance, some ETNs issue path-dependent fees, event risk hedge cost, futures execution cost or index calculation fees, all of which may contribute to higher tracking errors.
For past stories in this series, visit our “What is an ETF?” category.
Max Chen contributed to this article.