What is Leveraged ETN Tracking and How Does it Work

[Savitz Research]

An ETN or an Exchange Traded Note is a senior, unsecured,
unsubordinated debt security, which is issued by an underwriting bank.
ETNs are backed only by the credit of the issuer and they also possess
a maturity date.

Leveraged ETN tracking is designed for investors in order to provide
access to the returns of various market benchmarks. The returns of
ETNs are linked to the performance of a market benchmark or strategy,
from which investor fee is then deducted. Upon buying an ETN, the
underwriting bank promises to pay the investor the particular amount
reflected in the index, minus fees charged upon maturity. Therefore
ETNs have an additional risk in comparison to an ETF. If the credit
ratings of the underwriting bank goes down or if it goes bankrupt, the
value of the ETN gets eroded.

For more information, please visit: http://www.alerianmlp.com/