iPath Exchange Traded Notes are innovative investment products from Barclays that seek to provide investors with a way to access the returns of a market or strategy, less investor fees. The following are answers to questions financial professionals and individuals commonly ask about iPath Exchange Traded Notes.
iPath ETNs are senior, unsecured, unsubordinated debt securities issued by Barclays Bank PLC. They are designed to provide investors access to the returns of various market benchmarks. The returns of iPath ETNs are linked to the performance of a market benchmark or strategy, less investor fees.
Highlights
Payment at maturity
If you hold your iPath ETNs to maturity, you will receive a cash payment at maturity that is linked to the performance of the corresponding index during the period beginning on the trade date and ending at maturity, less investor fees.
Liquidating prior to maturity
You can liquidate iPath ETNs before their maturity date in two ways:
Trade them on the exchange
Redeem a large block of securities, typically at least 50,000 units of a particular iPath ETN, directly to Barclays Bank PLC, subject to the procedures described in the relevant prospectus. A redemption charge may apply.
Coupon
Interest will not be paid during the term of the iPath ETNs.
Investor fee
The investor fee is calculated cumulatively based on the Yearly Fee and the performance of the underlying index or currency exchange rate and increases each day based on the level of the index or currency exchange rate on that day. Because the investor fee reduces the amount of your return at maturity or upon redemption, if the value of the underlying decreases or does not increase significantly, you may receive less than the principal amount of your investment at maturity or upon redemption. For a more complete description of how the investor fee is calculated, please see the applicable product page and Pricing Supplement.
No principal protection
Investors will receive a cash payment linked to the performance of the corresponding index, less investor fees. The index may go up or down. Even if the index goes up, investors may not recover their principal once investor fees are deducted.
Ratings
The iPath ETNs are not rated, but rely on the ratings of the issuer, Barclays Bank PLC.
Unsecured debt
iPath ETNs are senior, unsecured, unsubordinated debt securities issued by Barclays Bank PLC.
Voting rights
Because the iPath ETNs are debt securities, they do not have any voting rights.
Distributions
The iPath ETNs currently available do not make dividend distributions.
(For more details, please refer to the prospectus for the relevant iPath ETN.)
Differences and similarities between ETNs and Exchange Traded Funds (ETFs)
Both ETNs and ETFs provide investors access to the returns of various market benchmarks. However, ETNs are senior, unsecured debt securities issued by Barclays Bank PLC, whereas ETFs are typically registered investment companies and are collateralized by an underlying portfolio of securities.
