Credit Suisse Group AG (CS) is offering an exchange-traded note tied to 50 of Europe’s largest companies after Barclays Plc (BARC) rolled out a similar security less than four months ago that has surged to sixth-largest in the U.S.
Both ETNs include “FI Enhanced Europe 50” in their names and started out tracking twice the gains and losses of the STOXX Europe 50 USD (Gross Return) Index, according to prospectuses filed with the U.S. Securities and Exchange Commission. Both securities charge an “exposure fee” of 0.76 percent more than the three-month London interbank offered rate.
The Credit Suisse note began trading today under the ticker FIEU.
In May, Barclays Plc introduced its ETN, which was structured with Fisher Asset Management LLC, under the symbol FEEU, according to data compiled by Bloomberg. The note, which had $778.7 million of assets at the close of trading yesterday, is the only ETN among the six biggest in the U.S. that’s less than two and a half years old.
Credit Suisse, Switzerland’s second-largest bank, issues nine other ETNs under its own name and 18 of the securities under the VelocityShares brand, according to data compiled by Bloomberg. The largest is the VelocityShares Daily Inverse VIX Short-Term ETN, with $814.6 million in total assets, Bloomberg data show.
Banks create structured notes by packaging debt with derivatives to offer customized bets to retail investors while earning fees and raising money. Derivatives are contracts whose value is derived from stocks, bonds, commodities and currencies, or events such as changes in interest rates or the weather.
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