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TheStreet Open House

UBS Launches Exchange-Traded Note With Significant Monthly Income Potential And 2x Leveraged Exposure To A Closed-End Fund Index

Stocks in this article: BDJBGYBOECIIEOSETVETWETYEXGNFJUBS

UBS Investment Bank announced that today is the first day of trading on the NYSE Arca ® for the ETRACS Monthly Pay 2xLeveraged Closed-End Fund ETN (NYSE:CEFL). CEFL is linked to the monthly compounded 2x leveraged performance of the ISE High Income™ Index (the “Index”), reduced by investor fees.

 

CEFL Profile

Income Potential     Variable monthly coupon linked to 2 times the cash distributions, if any, on the Index constituents
2x Index Yield 1 19.40%
Underlying Index ISE High Income™ Index
Leverage 2x leverage that is reset monthly, not daily
 

CEFL Offers Investors:

  • Significant income potential in the form of a variable monthly coupon linked to 2 times the cash distributions, if any, on the Index constituents. If the Index constituents do not make distributions, then investors will not receive any coupons.
  • Monthly compounded 2x leveraged exposure to an index comprised of 30 closed-end funds that vary by asset class, investment strategy, asset manager and investment region.
  • Potential for price appreciation as the closed-end funds in the Index are selected, in part, on the basis of their share price discount from net asset value.

“The index tracked by CEFL selects and ranks the 30 component closed-end funds on the basis of their income yield and their discount from NAV,” said Paul Somma, Senior ETRACS Structurer. “So CEFL is expected to provide investors significant income potential, as well as the opportunity for price appreciation, all by way of a single, exchange-traded security.”

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