I'm pretty sure inverse ETFs/ETNs use swaps or futures. If this one is done through futures, you need to worry about contract roll, which introduces loss.
Which particular ETN are you referring to? I'd be interested in reading the prospectus.
yes, there is a rolling cost but it's fairly small, at least relative to the mgmt fee. All up it costs around 0.87 a year. Not cheap and more than I would normally pay, but it does what I want. I didn't want to be seen to make any specific recommendations, so please no one take it that way. This is what I chose. Below is the Long, there is also a 10 yr.
FYI the rolling cost on UNG and USO is the main reason why its unprofitable and doesn't track the price of NG or CL very well at all. Many traders frontrun the roll, causing it to lose money every month.
Which particular ETN are you referring to? I'd be interested in reading the prospectus.