Exchange-traded sliced and diced

Despite the credit risk associated with ETNs, they have continued to garner huge inflows in the US. The degree of sophistication they offer has been keeping investors on their toes and while they remain a fraction of the ETF industry, these two markets have started to compete directly with one another. Hannah Collins reports

The exchange-traded note (ETN) industry in North America has gathered an impressive number of new assets since the start of 2012. In mid-February the notional outstanding for the US ETN market reached over $18 billion, an increase of more than 20% since the end of 2011. While ETN inflows had gradually been decreasing since April 2011 until the end of the year, 2012 has seen a strong pick up in volumes.

Barclays Capital has had inflows into its ETN series of around $2.5 billion since the start of