Notorious Cousins of the ETF Are Closing at Almost Record Pace

Investors have long been schooled on the risks of exchange-traded notes. Now it looks like issuers are waking up to them too.

Banks have already liquidated or delisted a near-record number of ETNs this year, while product launches remain sharply down from 2019.

The grim statistics highlight the crisis engulfing the sector as investors head for the exits, regulators ask questions and whipsawing markets create issuer headaches. Extreme swings spurred by Covid-19 have rocked the prices of notes tracking oil and volatility, in particular.

“ETNs’ future is every bit as dim as their past has been,” said Ben Johnson, ...