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The Palm Beach Letter’s Teeka Tiwari has an urgent sell alert for owners of certain “poisonous” exchange-traded notes (ETNs)…
Investors often confuse these financial instruments for their more famous “cousins,” exchange-traded funds (ETFs). But this common misunderstanding could mean a world of pain for some investors.
An ETF is secured by the shares of the underlying companies it tracks. But with ETNs, the backer is a single financial institution. The firm mimics the price action of the sector the ETN tracks… but in the end, you entrust a single counterparty with all of your risk.
In today’s 3-Minute Market Minder, Big T details the one counterparty you do NOT want holding your ETN today: Deutsche Bank. (Click here to view the 20 Deutsche Bank-backed ETNs Teeka says are a SELL.)