Exchange-traded notes

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Exchange-traded notes are a type of unsecured, unsubordinated debt security that was first issued by Barclays Bank PLC. This type of debt security differs from other types of bonds and notes in that ETN returns are based on the performance of a market index minus applicable fees, no period coupon payments are distributed and no principal protection exists.

ETNs combine the aspects of bonds and exchange traded funds (ETFs). Like ETFs, ETNs are traded on a major exchange during normal trading hours. However, investors can also hold the debt security until maturity. At that time the issuer will give the investor a cash amount that would be equal to principal amount (subject to the day's index factor).[1]