An exchange-traded note (ETN) is a senior, unsecured, unsubordinated debt security issued by an underwriting bank or by a special-purpose entity. Similar to other debt securities, ETNs may have a maturity date and are backed by the credit of the issuer, though some ETNs may have a portfolio of assets given as a collateral.
ETNs are designed to provide investors access to the returns of various market benchmarks. The returns of ETNs are usually linked to the performance of a market benchmark, a so-called market-linked note, or to the performance of an active investment strategy, in this case being called an actively managed certificate or performance-linked bond. In all cases, the returns are net of expenses and management fees.