Index Maven

Lehman Bros. Enters the ETN Market with 'Opta' Commodities, Private Equity

Reynold -- I agree with your concern regarding the default risk but the fact that you can sell the ETN on the exchange on any trading day effectively means the investor is only taking overnight credit risk. I don't know about you but my portfolio takes a heck of a lot more risk on a daily basis than overnight A+/A1 credit risk.

Which of the 6 Agriculture ETFs is Best?

Starting next week you will have a new choice for agg exposure (as well as overall commodities). The new line of Opta ETNs (provided by Lehman Brothers) will begin trading next week. Their Agg offering (ticker: EOH) has eight commodities (74% grains and 26% softs) -- heavy in Soybeans and Suger. Moreover, this agg offering uses an intelligent roll mechanic to capture positive roll yield.

Commodity ETF Overview

You forgot GSC (Goldman's GSCI enhanced ETN). Also in the open-end arena there is QRAAX

Unhappy with the IRS' Currency ETN Tax Ruling, Happy with Its Clarity

At last count the Internal Revenue Code was 4,766 pages. However, the portion most people need concern themselves with is only about 2800 pages - if that makes you feel better. The IRS ruling on currency ETNs (and other forward contracts on currency) is actually very narrow. I would not say it applies to the entire asset class. For instance, it's not clear it would apply to a basket of currencies since the ruling is based on a single currency. It certainly would not apply to an outperformance structure ($/pound vs. $/yen, for example). I view the ruling as very particular and narrow -- currency has long had its own special rules in the tax code (Section 988) and so it's not surprising the ruling is written the way it is.

An Interesting Development With India Funds

INP is now trading like a closed-end fund rather than ETN. Barclays can not issue any more notes due to restrictions by the Indian securities regulator (SEBI). If you go to the Barclays ipath web page and click press release you will see - www.ipathetn.com/pdf/0...
Unfortunately, people are not aware of this and keep buying INP which only serves to increase the premium. Note if SEBI releases this restriction Barclays will immediately issue more notes causing the price to fall. I don't believe SEBI will back off - Barclays will be forced to buy in INP.

Bear Stearns' New MLP ETN - Seeking Insight

Roger,

I have all the docs but can't attach them here and the SEC link does not auto transfer. However, if you go to the link below and serch the term "AMZS" you will find what you're looking for. The hook with this ETN is the K-1 tax issue. When a U.S. person buys an MLP that person may find themselves filing in 30 or more states (not fun). I think most people that buy MLPs ignore the state filing but that is dangerous. There is no ETF to invest in MLPs (due to a different tax issue affecting registered investment companies). However, there is a new CEF on the market to play MLPs (see ticker MTP). There are other CEFs that are MLP dedicated like FEN, FMO, KYE, TYG, TYY, KYN --- but only MTP has the tax favored status of being a registered investment company like many ETFs. The Bear ETN (ticker BSR) and the new fund MTP provide access the asset class with no tax issues. Note that BSR is not tax favorable -- all coupons are fully taxable.
Link to BSR FWP:
searchwww.sec.gov/EDGA...

Do Your ETF Dividends Qualify For the 15% Rule?

Actually, the law was changed in 2004 to exempt foreign investors from U.S. withholding tax on interest related dividends. Thus, a fixed income ETF can designate some or all of a dividend as constituting portfolio interest for withholding tax purposes. This exemption however will expire on 12/31/2007 unless Congress extends it.