(Disclosure: Morningstar licenses its indexes to certain ETF and ETN providers, including Barclays Global Investors (BGI), First Trust, Claymore, and ELEMENTS, for use in exchange-traded funds and notes. These ETFs and ETNs are not sponsored, issued, or sold by Morningstar. Morningstar does not make any representation regarding the advisability of investing in ETFs or ETNs that are based on Morningstar indexes.)

"So I can lose the money I've invested in an ETF if the fund company goes under, right?"

This is probably the last question an ETF provider wants to hear. And, yet, I've heard it asked--and been on the receiving end--a surprising number of times lately, most recently today.

Obviously, the question is borne out of a misconception--that an ETF's assets are within reach of the sponsoring fund company's creditors. That's simply not so--those assets are walled off and, thus, there's no credit risk whatsoever.

What's spurring these concerns? My guess is that the increasing prominence of ETNs has something do with it. We're hearing more and more about ETN credit risk and those concerns seem to be seeping into (tainting?) the traditional ETF world, logic notwithstanding.  

It raises an interesting question regarding the ETN market's growth--what price success? For instance, as ETNs become an increasingly meaningful part of the exchange-traded product market, the questions over credit risk are likely to multiply and sharpen. And with those questions comes the risk that investors, unfamilar with the distinction between traditional ETFs and ETNs, will paint all of these products with the same broad brush.

It's not an issue that's going to spur mass defections from ETFs. But it's certaintly something the traditional ETF providers will have to grapple with, especially those like Barclays who offer both ETFs and ETNs.