UBS Investment Bank announced that today is the first day of trading on the NYSE Arca ® for the ETRACS Monthly Pay 2x Leveraged Diversified High Income ETN (NYSE:DVHL). DVHL is linked to the monthly compounded 2x leveraged performance of the NYSE ® Diversified High Income Index (the “Index”), reduced by investor fees.
|Income Potential||Variable monthly coupon linked to 2 times the net cash distributions, if any, on the Index constituents|
|2x Index Yield1||13.63%|
|Underlying Index||NYSE® Diversified High Income Index|
|Leverage||2x leverage that is reset monthly, not daily|
- Significant income potential in the form of a variable monthly coupon linked to 2 times the net cash distributions, if any, on the Index constituents.
- Monthly compounded 2x leveraged 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 net cash distributions on the Index constituents 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 ClassWeighting||Sector||Sector Securities||Number ofConstituents||Sector TargetWeighting|
|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 RelatedAssets||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||10.23%|
|iShares iBoxx $ High Yield Corporate Bond ETF||HYG||High Yield Bonds||9.91%|
|iShares US Preferred Stock ETF||PFF||Preferred Stock||6.94%|
|Market Vectors High Yield Municipal Index ETF||HYD||Municipal Bonds||4.97%|
|Ares Capital Corp||ARCC||Business Development Companies||4.05%|
|Energy Transfer Partners LP||ETP||Energy MLPs||4.05%|
|iShares International Select Dividend ETF||IDV||International Equities||3.89%|
|PowerShares Insured National Municipal Bond ETF||PZA||Municipal Bonds||3.74%|
|Prospect Capital Corp||PSEC||Business Development Companies||2.56%|
|American Capital Agency Corp||AGNC||Mortgage REITs||2.37%|
|Source: NYSE Group, Inc., as of October 31, 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
UBS specifically prohibits the redistribution or reproduction of this material in whole or in part without the prior written permission of UBS and UBS accepts no liability whatsoever for the actions of third parties in this respect. © UBS 2013. The key symbol, UBS and ETRACS are among the registered and unregistered trademarks of UBS. Other marks may be trademarks of their respective owners. All rights reserved.Notes to Editors Headquartered in Zurich and Basel, Switzerland, UBS is a client-focused financial services firm that offers a combination of wealth management, asset management and investment banking services on a global and regional basis. By delivering a full range of advice, products and services to its private, corporate and institutional clients, UBS aims to generate sustainable earnings, create value for its shareholders, and become the choice of clients worldwide. UBS is present in all major financial centers worldwide. It has offices in more than 50 countries, with about 36% of its employees working in the Americas, 35% in Switzerland, 17% in the rest of Europe, the Middle East and Africa and 12% in Asia Pacific. UBS employs about 62,000 people around the world. Its shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE). www.ubs.com/media