An ETF Issuer’s Website Goes Dark

Credit Suisse ETN website is down for repairs.

[Editor's Note: A basic website has been restored as of 9/22/2014.]

ETFs have enjoyed huge success thanks to specific advantages over mutual funds, including low cost, tax efficiency and transparency.

Lately, one issuer has fallen down on the “transparency” part of the job.

The online home pages for 12 Credit Suisse funds, a product suite totaling more than $1.8 billion in assets, have been dark for more than two weeks. Investors searching for information from the issuer on funds like the Credit Suisse Cushing 30 MLP ETN (MLPN)—a product with $930 million in assets—come up empty.

Things can change fast on the Web; for now, a link to MLPN’s home page returns a message saying “Down for maintenance, please check back later.”

Issuer websites—when operative—provide basic fund information straight from the source: fee, strategy, top holdings, performance, legal documents and more. Without this, current and prospective investors don’t get the full picture of the investment offering.

What’s In An ETN, Anyway?

The Credit Suisse funds are actually exchange-traded notes (ETNs), not ETFs.

Unlike ETFs, ETNs don’t have “holdings,” but their underlying indexes describe investors’ exposure. Index providers typically don’t permit public disclosure of the full list of holdings and weights, which makes ETNs inherently less transparent than ETFs. (Most ETF issuers provide daily disclosure of all positions on their home page.)

Still, a top 10 list of names in the ETN’s index can go a long way toward providing insight for performance. That’s especially true for MLPN, given major corporate actions in the space. Given the built-in disadvantage for holdings disclosure, ETN issuers need to try even harder than ETF issuers to maintain a comparable level of transparency, which makes a site outage more frustrating.

Invested capital and returns on that capital in ETNs like MLPN aren’t backed by underlying assets, but instead by Credit Suisse’s promise to pay. While counterparty risk is best measured by tangible metrics like CDS rates, investors in MLPN and other Credit Suisse ETNs might not get a warm and fuzzy feeling when the note’s backer pulls the product site down.

I won’t guess why Credit Suisse had to take down its current site to make whatever changes it has in mind. The firm hasn’t yet responded to inquiries on this topic. But current investors in their ETNs deserve better.

At the time this article was written, the author held no positions in the security mentioned. Contact Paul Britt at [email protected] or follow him on Twitter @PaulBritt_ETF.