Barclays Capital recently announced the launch of the first exchange traded note (ETN) that is traded in the Asian region (Other Ways To Play Asia). This new ETN will be traded on the Singapore Exchange and will track the Dow Jones-UBS Commodity Index. The ETN will enable investors to gain exposure to energy, industrial metals, precious metals, livestock and agriculture and will come with the benefit of not having tracking errors (More on Tracking Errors).
The launch of this new product comes at a time when the iPath family of ETNs has been facing some hurdles. U.S. listed commodity based ETNs linked to oil and natural gas, like the iPath S&P GSCI Crude Oil Ttl Rtn Idx ETN (OIL), came under pressure a few months ago when investors feared that the Commodities Future Trade Commission (CFTC) was going to impose strict position limits and restrictions that would eventually distort prices.
A second blow to ETNs came last week when Barclays stopped issuing new shares of the iPath MSCI India ETN (INP) after Indian regulators barred it from trading offshore derivatives that were linked to Indian stocks (More on India).
Despite these temporary setbacks, the iPath ETNs continue to attract assets and offer investors an easy, cheap and relatively liquid way to access hard to reach markets. As a result, there are more than 30 different iPath ETNs which comprise over $5 billion in market capitalization.
