Monday, September 15, 2008

What Happens With Lehman ETNs?

As some of you may know, An exchange traded note (ETN) works differently then an exchange traded fund (ETF). If you buy an ETF, you are owning shares of a physical asset, whereas if you buy an ETN, you are purchasing a debt note; therefore making you suseptiple to credit risk. Now that Lehman has filed for bankruptcy, what happens to investors that have purchased any of the Lehman Opta ETNs? If these notes are included in the bankruptcy, investors will most likely lose out unless a buyer purchases that unit. There was a good article on indexuniverse.com about this.

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