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This article is about Exchange-Traded Notes. For the article on the company with ticker ETN, see Eaton (ETN).

Exchange-Traded Notes are structured products that are issued as debt securities by banks and are based on the performance of various assets, indexes and strategies. Buying an ETN, instead of putting your money into a fund that acutally buys and holds assets, is like buying debt from the ETN issuer—much like a bond investor would. Instead of being backed by the assets that are in the investment fund like ETFs are, ETNs are simply backed by the full faith and credit of the issuer.

ETNs have maturity dates. When you hold an ETN until the maturity date, you receive a one-time payment based on the performance of the underlying asset, index or strategy. For instance, buy an ETN covering oil and the value of oil appreciates during the time of tenure, you receive a higher payment at maturity than you would if the value of oil depreciates during the same time.

Of course, it is possible to sell the ETN at any time on the open market. However, that is subject to market risk and one might end up getting the wrong end of the deal by doing so.