An ETN investor acts as a lender to the issuer of the note, which promises to repay the investor’s principal with interest that is supposedly gauged to the riskiness of the loan – VXX was created to hold short-term futures contracts linked to the Chicago Board of Options Exchange Market Volatility Index. But the issuer’s payment obligation is unsecured, and if the issuer defaults, the investor can lose his or her entire investment. ETNs have many other risks and problems including illiquidity, high fees, lack of transparency, credit (default) risk, skewed or abnormal returns, and extreme volatility.
Investors have poured more than $5.8 billion into VXX in the past few years. In September 2010, VXX reached $2.3 billion in assets, but it has done nothing but lose money for investors – an investment of $1,000 in January 2009 would be worth approximately $25 today.
Have you suffered losses in iPath S&P 500 VIX Short-Term Futures exchange-trade notes? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over , Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Robert Wayne Pearce
Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $125 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.
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