logo
  Join        Login             Stock Quote
These Overlooked Securities Yield Up To 16%
By: StreetAuthority   Monday, April 23, 2012 10:21 AM
Symbols: BDC, ETN, JPM, MS, UBS


But that's where their similarities end.

Unlike ETFs, ETNs do not represent a claim on shares of stock, bonds or commodities. The ETN issuer -- usually an investment bank such as Morgan Stanley (NYSE: MS) or JPMorgan Chase (NYSE: JPM) -- may invest in the index companies to collect returns, but ETN holders like you and me don't have a claim on those assets.

Instead, ETNs are promissory notes. They are senior unsecured debt that promises to match the return of a specific benchmark.

Like bonds, ETNs have a maturity date. At maturity, generally 15 to 30 years from the issue date, the ETN is redeemed. Unlike bonds, however, you don't receive the face value in cash. Instead, the amount you receive is based on the performance of the index. What you get at maturity depends on how well the index has performed.

But one of the features that may be attractive to many investors is that ETNs can help you avoid some potentially hairy tax issues.

As debt, ETNs distribute interest income that's taxable at your marginal income tax rate. Although the income doesn't qualify for the reduced dividend tax rate, you do receive a simple 1099-DIV form for the income you receive.

Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

  
Advertisement

Related Press Releases
Popular Articles
Advertisement
Recent Articles by StreetAuthority
Advertisement




Subscribe to Email Alerts rss feed or RSS feeds rss feed for articles from more than 800 contributors and press releases, SEC filings and full text news from thousands of sources.



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.