Abstract

http://ssrn.com/abstract=2117299
 


 



Are ETNs Realizing Their Potential? An Empirical Investigation of ETNs vs. Other Exchange-Traded Products in the Precious Metals’ Space


Hélyette Geman


University of London, Birkbeck College - School of Economics, Mathematics and Statistics

Lovjit Thukral


Deutsche Bank AG (London)

Colbrin Wright


Brigham Young University

2012

Journal of Index Investing, 2012, Forthcoming

Abstract:     
Within the precious metals space, we outline and empirically investigate three potential advantages that ETNs may have relative to other exchange traded products such as ETFs. First, ETNs may be able to offer investors access to a wider array of assets, commodities, currencies and indices with a greater variety of leverage ratios. We find that ETNs do, in fact, offer investors a much greater variety of leverage ratios in the precious metals space compared to other exchange traded products. Second, ETNs may be able to offer investors lower annual expenses than comparable ETFs or other similar exchange traded products. We are unable to statistically corroborate this notion. We do, however, note that some exchange traded products charge non-trivial fees (upwards of 3.74%) to investors that are not included in the annual expense fee, whereas ETNs assess no such implicit fees. Third, ETNs may enjoy greater price efficiency owing to the absence of tracking error. We find no empirical evidence supporting this possibility.

Keywords: Exchange-Traded Notes, Exchange-Traded Funds, Precious Metals

JEL Classification: G10, G11, G12, G14

Accepted Paper Series


Not Available For Download

Date posted: July 26, 2012  

Suggested Citation

Geman, Hélyette and Thukral, Lovjit and Wright, Colbrin, Are ETNs Realizing Their Potential? An Empirical Investigation of ETNs vs. Other Exchange-Traded Products in the Precious Metals’ Space (2012). Journal of Index Investing, 2012, Forthcoming. Available at SSRN: http://ssrn.com/abstract=2117299

Contact Information

Helyette Geman
University of London, Birkbeck College - School of Economics, Mathematics and Statistics ( email )
Malet Street
London, WC1E 7HX
United Kingdom
Lovjit Thukral
Deutsche Bank AG (London) ( email )
Winchester House
1 Great Winchester Street
London, EC2N 2DB
United Kingdom
Colbrin Wright (Contact Author)
Brigham Young University ( email )
United States
(801) 422 1224 (Phone)
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