Understanding Exchange-Traded Commodities & Notes

In part III of his guide to deciphering exchange-traded products, Morningstar's Gordon Rose explains the basics of exchange-traded commodities, currencies and notes

Gordon Rose, CIIA, CAIA, 7 June, 2011 | 6:58PM

Read Part I and Part II of this guide to exchange-traded products.

Financial literature is flooded with acronyms many investors struggle to keep up with. It seems as though every new financial product comes with at least two new acronyms. The ETF world is no exception. In fact, already at this point is where we find the first misconception, as we define it Exchange Traded Fund or ETF is not an umbrella term but rather a specific product-type within a wider range.

In part II of this guide, I discussed exchange-traded funds (ETFs), which represent about 90% of the overall exchange-traded product (ETP) market in terms of total assets under management. Here, I will provide a more detailed analysis of the key aspects of exchange-traded notes (ETNs) and exchange-traded commodities and currencies (ETCs).

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Gordon Rose, CIIA, CAIA,

Gordon Rose, CIIA, CAIA,  is an ETF analyst with Morningstar Europe.

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