Exchange-traded products -- ETFs and ETNs -- focusing on Master Limited Partnerships have been coming to market at a rapid pace, and investors now have seven to choose from. UBS E-TRACS 1x Monthly Short Alerian MLP Infrastructure Total Return Index ETN (MLPS), however, is the first to offer inverse exposure to the MLP asset class since it began trading Wednesday.
MLPS is designed to provide a short exposure to the MLP infrastructure market by tracking the inverse performance of the Alerian MLP Infrastructure Total Return Index, less investor fees of 0.85% per year. The 100% inverse exposure will be reset monthly on the first trading day of the month. These securities are not intended to be used in a long-term buy-and-hold strategy. Performance for periods greater than one month is likely to be either greater than or less than the inverse performance of the underlying index as a result of compounding.
Exchange-traded notes are unsecured debt obligations and subject to credit risk from the issuer. UBS, the issuer for MLPS, has additional information in the MLPS fact sheet and the prospectus. The ETN is linked to the inverse returns of a total return index and will not pay any coupons. Yearly tax reporting will be on 1099 forms, not K-1s.
|UBS has issued the first inverse-exposure return index ETN for the MLP asset class.|
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