|Underlying Index||NYSE ® Diversified High Income Index|
|Income Potential||Variable monthly coupon linked to the cash distributions, if any, of the 138 Index constituents, less investor fees and any withholding taxes|
- Significant income potential in the form of a variable monthly coupon linked to the cash distributions, if any, on the Index constituents, less investor fees and any withholding taxes.
- Exposure to an index comprised of a diversified portfolio of 138 publicly-traded, income-producing securities.
- Diversification across geographic regions (e.g., emerging market bonds and international equities) and across asset classes and sectors (e.g., equities, fixed income, MLPs, BDCs, REITs, preferred stock, high yield bonds, etc.).
About the NYSE ® Diversified High Income IndexThe NYSE ® Diversified High Income Index (the “Index”) measures the performance of a diversified basket of 138 publicly-traded securities that historically pay significant dividends or distributions (referred to herein as “dividends”). According to the Index sponsor, NYSE Group, Inc., the Index’s features and construction seek to highlight income, while the diversification of the Index constituent sectors seeks to reduce price volatility. The Index methodology incorporates minimum free float market capitalization, as well as dividend yield, liquidity and asset class and sector weighting requirements. The Index is rebalanced quarterly to maintain the sector target weightings set forth in Table 1 below. The Index is a price return index (i.e., the reinvestment of dividends is not reflected in the Index; rather, any cash distributions on the Index constituents, less investor fees and any withholding taxes, are reflected in the variable monthly coupon that may be paid to investors of the ETN). The Index was created on August 20, 2013 and, therefore, has no performance history prior to that date.
|Table 1 – Asset Classes, Sectors and Sector Target Weightings|
|Asset Class||Asset Class Weighting||Sector||Sector Securities||Number of Constituents||Sector Target Weighting|
|Energy MLPs||Energy MLPs||25||15.00%|
|Mortgage REITs||Mortgage REITs||15||7.50%|
|U.S.-listed Equities||U.S.-listed Equities||50||7.50%|
|Fixed Income, Bonds and Related Assets||40.00%||Municipal Bonds||Municipal BondETFs||3||10.00%|
|High Yield Bonds||High Yield BondETF||1||10.00%|
|Emerging MarketsBonds||Emerging MarketsBond ETF||1||10.00%|
|Preferred Stock||Preferred StockETFs||4||10.00%|
|Source: NYSE Group, Inc.|
|Top 10 Index Constituents|
|PowerShares Emerging Markets Sovereign Debt ETF||PCY||Emerging Markets Bonds||9.97%|
|iShares iBoxx $ High Yield Corporate Bond ETF||HYG||High Yield Bonds||9.93%|
|iShares US Preferred Stock ETF||PFF||Preferred Stock||7.04%|
|Market Vectors High Yield Municipal Index ETF||HYD||Municipal Bonds||4.94%|
|Ares Capital Corp||ARCC||Business DevelopmentCompanies||4.15%|
|Energy Transfer Partners LP||ETP||Energy MLPs||4.00%|
|iShares International Select Dividend ETF||IDV||International Equities||3.80%|
|PowerShares Insured National Municipal Bond ETF||PZA||Municipal Bonds||3.74%|
|Prospect Capital Corp||PSEC||Business DevelopmentCompanies||2.66%|
|American Capital Agency Corp||AGNC||Mortgage REITs||2.66%|
|Source: NYSE Group, Inc., as of September 13, 2013|
- 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
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