Chinese and Indian Currency ETNs debut

March 22, 2008

SAN DIEGO (ETFguide.com) - Morgan Stanley has launched two exchange-traded notes (ETNs) that follow China and India's main currencies.

The Market Vectors-Chinese Renminbi/USD ETN (Ticker: CNY)  and the Market Vectors-Indian Rupee/USD ETN (Ticker: INR) were listed on the NYSE Arca this week.

Both notes are the first to provide market exposure to the Chinese and Indian currencies.

The ETNs are issued by Morgan Stanley and New York-based investment manager Van Eck Global is the exclusive marketer.

CNY aims to track the performance of rolling investments in short-term forward contracts in China’s currency, the Renminbi.

INR will track the performance of rolling investments in short-term forward contracts in India’s currency, the Rupee.

The benchmark currency indices underlying the notes are calculated and maintained by Standard & Poor’s.

The Market Vectors Currency ETNs are senior unsecured debt securities of Morgan Stanley.

Investors may trade ETNs on an exchange at market price or receive, at maturity or upon early redemption, a cash payment from the issuer based on the applicable index performance, less investor fees. 

ETNs are debt securities that track their underlying index (minus fees) without tracking error. This is one of their main advantages.

A disadvantage is that as debt securities (unlike ETFs), investors absorb the credit risk of the issuer. This is an important aspect to keep in mind as many financial institutions have been hit hard by the recent credit crunch.

For more information about ETNs visit ETFguide.com’s online education center by clicking here: http://www.etfguide.com/etfeducation.htm