Barclays Global Investors, by far the dominant player in the exchange-traded fund market, has been offering a variation on the popular theme for the past two years, eight exchange-traded notes, and now Merrill Lynch plans to join the nascent market, Registered Rep reports.

An ETN is more tax efficient than an ETF because it is not required to distribute dividends to investors every year. It can also track indexes more closely and cost less because it owns a note tracking the benchmark  rather than individual stocks.

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