These “ETF Cousins” Plunged 80%+ (it won’t get better)

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These “ETF Cousins” Plunged 80%+ (it won’t get better)

If there’s one trap I’ve seen investors fall into time and time again, it’s “chasing yield”: getting pulled in by a high dividend yield and not digging deeper to see if that payout is really sustainable.

An asset class that’s collapsed in 2020—and is now on the verge of vanishing completely—is a classic example of the dangers of getting distracted by a high current yield.

The investments in question are called exchange-traded notes (ETNs), some of which held out the promise of mid-double-digit yields. Unfortunately, these funds—which some folks disastrously confuse with their bigger brothers, exchange traded funds (ETFs)—came with a  catch that’s now sending their values to zero.… Read more

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Your Crisis Safety Plan: Dump These Unsafe Dividends Now

There’s one investment you simply must not hold in this market crash—a highly speculative, high-yielding instrument called an exchange traded note (ETN).

Does the name sound familiar? That’s probably because it sounds like “exchange-traded fund,” or ETF. But an ETN isn’t like an ETF at all—and that’s a distinction many people fail to make.

So what’s an ETN, then?

It’s a highly leveraged, speculative instrument that lets investors access particular asset classes. In good times, ETNs can skyrocket. These, however are, er, more interesting times.

ETNs: Guaranteed Losses in the Coronavirus Crisis

As a result of the coronavirus selloff, ETNs aren’t just going to rack up big losses—they’re going to go to zero.… Read more

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