Contango Fighter, GASZ, Significantly Outperforms Leading Natural Gas ETF, UNG

UBS Investment Bank today announced that the ETRACS Natural Gas Futures Contango ETN (Ticker: GASZ), linked to the ISE Natural Gas Futures Spread™ Index (the “Index”), has significantly outperformed the leading natural gas ETF, the United States Natural Gas Fund (Ticker: UNG), year-to-date, during the last 6 months and since both products could be purchased on an exchange.

GASZ is designed to capitalize on potential contango market environments typical to natural gas futures contracts. GASZ offers the potential to profit from the negative roll costs associated with the steepness in the short end of the natural gas futures curve, making it suitable for long-term investment horizons. Securities which fail to address the negative roll costs associated with contango markets lose value over time as investors are forced to repeatedly sell futures contracts at low prices and replace these with higher priced futures contracts.
                                           
Ticker            

YTD Total

Return*
           

6-Month Total

Return*
           

Total Return Since

6/16/2011*^
                                   
GASZ 5.80% 12.78% 14.91%
 
UNG -14.52% -44.92% -51.26%
                                           

Source: Bloomberg, 2/6/2012

* The intraday values for each security (On Bloomberg: GASZIV Equity <Go> and UNGIV Equity <Go>) were used to calculate the returns

^ The first day that both products could be purchased on an exchange

As an ETN, GASZ also benefits from the elimination of index tracking error and avoids the tax administration burden associated with K-1 forms 1. However, ETRACS ETNs are subject to investor fees, and therefore, the return on the ETNs will always be less than the return on a direct investment in the Index.

About the ISE Natural Gas Futures Spread™ Index

The ISE Natural Gas Futures Spread™ Index, through a series of investments in natural gas sub-indices, effectively provides short exposure in front month natural gas futures contracts and long exposure in mid-term natural gas futures contracts. This is achieved by taking a 100% long position in the components of the ISE Short Front Month Natural Gas Futures™ Index, which provides short (or inverse) exposure to the ISE Long Front Month Natural Gas Futures™ Index and an aggregate 100% long position in the components of the ISE Twelfth Month Natural Gas Futures™ Index, ISE Thirteenth Month Natural Gas Futures™ Index and ISE Fourteenth Natural Gas Futures™ Index (33.33% per index), which provides long exposure to the mid-term Henry Hub Natural Gas Futures (NG) futures contracts. The Index is rebalanced monthly before the sub-indices’ roll process to maintain the 1:1 long/short ratio.

About ETRACS

For further information about ETRACS ETNs, go to http://www.etracs.com.

Exchange Traded Access Securities ETNs (“ETRACS ETNs”), are exchange-traded notes, an innovative class of investment products offering access to markets and strategies that may not be readily available to investors, and offer unique diversification opportunities in a number of different sectors. ETRACS ETNs may offer:
  • Access to asset classes with historically low correlations to more traditional asset classes
  • Convenience of an exchange-traded security
  • Transparent exposure to a published index

ETRACS ETNs are senior unsecured notes issued by UBS AG (“UBS”), are traded on NYSE Arca, and can be bought and sold through a broker or financial advisor. An investment in ETRACS ETNs is subject to a number of risks, including the risk of loss of some or all of the investor’s principal, and is subject to the creditworthiness of UBS. We urge you to read the more detailed explanation of risks described under “Risk Factors” in the prospectus supplement for the ETRACS ETN.

There are 41 ETRACS ETNs:

ETRACS ETN Name
               

Ticker
 

Master Limited Partnerships
Alerian MLP Infrastructure MLPI
2x Monthly Leveraged Long Alerian MLP Infrastructure MLPL
1x Monthly Short Alerian MLP Infrastructure TR* MLPS
Alerian Natural Gas MLP MLPG
Wells Fargo MLP Index MLPW
 

Business Development Companies
Wells Fargo Business Development Company Index BDCS
2x Monthly Leveraged Wells Fargo Business Development Company Index BDCL
 

Alpha Strategies
Long-Short S&P 500 VIX Futures XVIX
Natural Gas Futures Contango ETN GASZ
Oil Futures Contango ETN OILZ
 

Hybrid
S&P 500 Gold Hedged SPGH
Fisher-Gartman Risk On ETN ONN
Fisher-Gartman Risk Off ETN OFF
 
 

Commodities
CMCI TR UCI
CMCI Agriculture TR UAG
CMCI Energy TR UBN
CMCI Food TR FUD
CMCI Gold TR UBG
CMCI Industrial Metals TR UBM
CMCI Livestock TR UBC
CMCI Long Platinum ER* PTM
CMCI Short Platinum ER PTD
CMCI Silver TR USV
DJ-UBS Commodity Index TR DJCI
 

Equities
Next Generation Internet ETN EIPO
Monthly 2xLeveraged Next Generation Internet ETN EIPL
Long ISE Solid State Drive Index SSDD
2xLeveraged Long ISE Solid State Drive Index SSDL
Monthly 2xLeveraged ISE Cloud Computing TR LSKY
 

Volatility
Long-Short S&P 500 VIX Futures XVIX
Long 1-Month S&P 500 VIX Futures VXAA
Long 2-Month S&P 500 VIX Futures VXBB
Long 3-Month S&P 500 VIX Futures VXCC
Long 4-Month S&P 500 VIX Futures VXDD
Long 5-Month S&P 500 VIX Futures VXEE
Long 6-Month S&P 500 VIX Futures VXFF
Short 1-Month S&P 500 VIX Futures AAVX
Short 2-Month S&P 500 VIX Futures BBVX
Short 3-Month S&P 500 VIX Futures CCVX
Short 4-Month S&P 500 VIX Futures DDVX
Short 5-Month S&P 500 VIX Futures EEVX
Short 6-Month S&P 500 VIX Futures FFVX
*TR=Total Return and ER=Excess Return

The contents of any website referred to in this communication are not part of, or incorporated by reference in, this communication. UBS has filed a registration statement (including a prospectus, as supplemented by a prospectus supplement for the offerings of the ETRACS ETNs) with the Securities and Exchange Commission (the “SEC”) for the offerings to which this communication relates. Before you invest, you should read these documents and any other documents that UBS has filed with the SEC for more complete information about UBS and the offering to which this communication relates. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, you can request the prospectus and the applicable prospectus supplement by calling toll-free (+1.877.387.2275).

Futures and futures options trading is speculative, involves a high degree of risk and is not suitable for all investors. Past performance is not necessarily indicative of future results.

1 Significant aspects of the tax treatment of the ETNs are uncertain. You should consult your own tax advisor about your own tax situation.

© UBS 2012. The key symbol, UBS and ETRACS are among the registered and unregistered trademarks of UBS. “UBS Bloomberg Constant Maturity Commodity Index” and “CMCI” are service marks of UBS and/or Bloomberg. “Dow Jones,” “DJ-UBS Commodity Index” and “DJ-UBSCI” are service marks of Dow Jones & Company Inc. and UBS AG, as the case may be. “Standard & Poor’s®,” “S&P®,” “S&P 500®,” “Standard & Poor’s 500™,” “S&P 500 Gold Hedged,” “S&P 500 VIX Short-Term Futures Index,” “S&P 500 VIX 2-Month Futures Index,” “S&P 500 VIX 3-Month Futures Index,” “S&P 500 VIX 4-Month Futures Index,” “S&P 500 VIX Mid-Term Futures Index,” and “S&P 500 VIX 6-Month Futures Index” are trademarks of Standard & Poor’s Financial Services LLC (“S&P”) and have been licensed for use by UBS. “VIX” is a registered trademark of the Chicago Board Options Exchange, Incorporated (“CBOE”) and has been licensed to S&P. The ETRACS ETNs are not sponsored, endorsed, sold or promoted by S&P or CBOE and neither S&P nor CBOE makes any representation regarding the advisability of investing in the ETNs. “ISE Cloud Computing™ Total Return Index”, “ISE Solid State Drive™ Index”, “ISE Oil Futures Spread™”, “ISE Natural Gas Futures Spread™”, “ISE™®”, and “International Securities Exchange®” are trademarks of International Securities Exchange, LLC ("ISE" or "Licensor") and have been licensed for use for certain purposes by UBS Securities LLC and its affiliates. UBS AG’s ETRACS Monthly 2xLeveraged ISE Cloud Computing TR Index ETN, ETRACS ISE Solid State Drive Index ETN, ETRACS Monthly 2xLeveraged ISE Solid State Drive Index ETN, ETRACS Natural Gas Futures Contango ETN and ETRACS Oil Futures Contango ETN based on the ISE Cloud Computing™ Total Return Index, ISE Solid State Drive™ Index, ISE Natural Gas Futures Spread™ Index and the ISE Oil Futures Spread™ Index, respectively, are not sponsored, endorsed, sold or promoted by ISE, and ISE makes no representation regarding the advisability of trading in such product(s). Alerian MLP Infrastructure Index, Alerian Natural Gas MLP Index, Alerian MLP Infrastructure Total Return Index, Alerian Natural Gas MLP Total Return Index, AMZI, AMZIX and ANGI are trademarks of GKD Index Partners, LLC d/b/a Alerian and their use is granted under a license from GKD Index Partners. Wells Fargo Securities, Wells Fargo Securities, LLC, Wells Fargo, and Wells Fargo® Master Limited Partnership Index are trademarks of Wells Fargo & Company and have been licensed for use by UBS AG. ETRACS Wells Fargo MLP Index is not issued, guaranteed, sponsored, endorsed, sold or promoted by Wells Fargo & Company, Wells Fargo Securities, LLC or their subsidiaries and affiliates (collectively, “Wells Fargo”). Wells Fargo makes no representation or warranty, express or implied, to investors in the ETRACS ETNs or any member of the public regarding the advisability of investing in securities generally or in this ETRACS Wells Fargo MLP Index particularly or the ability of any data supplied by Wells Fargo or any Index to track financial instruments comprising the Index or any trading market. Wells Fargo & Company does not guarantee that the Index referenced by the ETRACS ETNs has been accurately calculated and shall not have any liability for any error in the calculation. Wells Fargo’s only relationship to UBS AG is the licensing of certain intellectual property rights relating to the Index as well as trademarks and trade names of Wells Fargo and of the data supplied by Wells Fargo that is determined, composed, compiled and calculated by Wells Fargo or a third party index calculator, without regard to this ETRACS Wells Fargo MLP Index. Wells Fargo has no obligation to take into consideration the ETRACS Wells Fargo MLP Index or investors in the ETRACS ETNs when determining, composing, compiling or calculating the data. Wells Fargo has no obligation or liability in connection with the listing, registration, distribution, administration, marketing, trading or redemption or settlement by the issuer or otherwise of this ETRACS Wells Fargo MLP Index. Wells Fargo does not guarantee the accuracy and/or the completeness of the index or of any data supplied by it or any data included therein. Wells Fargo makes no warranty, express or implied, as to results to be obtained by UBS AG and the ETRACS Wells Fargo MLP Index, or any other person or entity from the use of index or of the data supplied by Wells Fargo or any data included therein. Wells Fargo makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to the index and the data supplied by Wells Fargo or any data included therein. Without limiting any of the foregoing, in no event shall Wells Fargo have any liability for any special, punitive, indirect, or consequential damages (including lost profits), even if notified of the possibility of such damages. "MBF Index Holdings, LLC”, “The Fisher-Gartman Risk Index”, “The Fisher-Gartman Equity Subindex” and “The Fisher-Gartman Sovereign Bond Subindex” are trademarks of MBF Index Holdings, LLC and have been licensed for use by UBS AG. The ETRACS Fisher-Gartman Risk On ETN and ETRACS Fisher-Gartman Risk Off ETN are not issued by, sponsored, endorsed, sold or promoted by MBF Index Holdings, LLC or its affiliates and MBF Index Holdings, LLC makes no representation regarding the advisability of investing in the product. MBF Index Holdings, LLC does not guarantee that the Index referenced by the product has been accurately calculated and shall not have any liability for any error in the calculation. Other marks may be trademarks of their respective owners. All rights reserved. UBS assumes sole responsibility for this marketing material, which has not been reviewed by Bloomberg.

Notes to Editors

UBS draws on its 150-year heritage to serve private, institutional and corporate clients worldwide, as well as retail clients in Switzerland. We combine our wealth management, investment banking and asset management businesses with our Swiss operations to deliver superior financial solutions.

UBS is present in all major financial centers worldwide. It has offices in over 50 countries, with about 37% of its employees working in the Americas, 37% in Switzerland, 16% in the rest of Europe and 10% in Asia Pacific. UBS employs about 65,000 people around the world. Its shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).

www.ubs.com/media

Copyright Business Wire 2010

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