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.
|Income Potential||Variable monthly coupon linked to 2 times the cash distributions, if any, on the Index constituents|
|2x Index Yield1||19.40%|
|Underlying Index ISE 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 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.
About the ISE High Income™ IndexThe ISE High Income™ Index (the “Index”) measures the performance of 30 U.S. closed-end funds, as selected and ranked by the Index sponsor in accordance with the Index methodology. To be eligible for inclusion in the Index, a fund must be domiciled in the U.S., be listed on a U.S. securities exchange and satisfy minimum market capitalization and liquidity requirements. Each eligible fund is ranked in descending order in accordance with a multivariate ranking scheme based on three factors: yield; share price discount from net asset value; and trading liquidity, with the 30 highest-ranking funds included in the Index. The Index constituent weights are determined by a modified linear weighting methodology that results in higher-ranked funds receiving a greater Index weighting than lower-ranked funds. The Index is rebalanced yearly to ensure that Index constituents do not exceed Index target weightings. 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 are reflected in the variable monthly coupon that may be paid to investors of CEFL). The Index was created on April 11, 2013 and, therefore, has no performance history prior to that date.
|Asset Managers Represented in the Index*|
|Allianz / PIMCO||Clough||GAMCO||Nuveen|
|BlackRock||Eaton Vance||ING||Wells Fargo|
Source: International Securities Exchange, LLC, as of November 30, 2013
|Top 10 Index Constituents|
|Eaton Vance Enhanced Equity Income Fund II||EOS||4.90%|
|Eaton Vance Tax-Managed Diversified Equity Income Fund||ETY||4.81%|
|AllianzGI NFJ Dividend, Interest & Premium Strategy Fund||NFJ||4.76%|
|Eaton Vance Tax-Managed Global Diversified Equity Income Fund||EXG||4.68%|
|Eaton Vance Tax-Managed Global Buy-Write Opportunities Fund||ETW||4.67%|
|BlackRock Global Opportunities Equity Trust||BOE||4.61%|
|BlackRock Enhanced Capital and Income Fund, Inc.||CII||4.58%|
|BlackRock Enhanced Equity Dividend Trust||BDJ||4.56%|
|BlackRock International Growth and Income Trust||BGY||4.55%|
|Eaton Vance Tax-Managed Buy-Write Opportunities Fund||ETV||4.53%|
Footnotes1 This figure is equal to 2 times the Index Yield calculated as of November 30, 2013 by the sponsor of the Index, International Securities Exchange, LLC. Investors are not guaranteed any coupon or distribution amount under the ETN. About ETRACS For further information about ETRACS ETNs, go to www.etracs.com. 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
The Securities are not sponsored, endorsed, sold or promoted by ISE. ISE makes no representation or warranty, express or implied, to the owners of the Securities or any member of the public regarding the advisability of trading in the Securities. ISE’s only relationship to UBS is the licensing of certain trademarks and trade names of ISE and of the Index, which is determined, composed and calculated by ISE without regard to UBS or the Securities. ISE has no obligation to take the needs of UBS or the owners of the Securities into consideration in determining, composing or calculating the Index. ISE is not responsible for and has not participated in the determination of the timing of, prices at, or quantities of the Securities to be listed or in the determination or calculation of the equation by which the Securities are to be converted into cash. ISE has no obligation or liability in connection with the administration, marketing or trading of the Securities.ISE DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA INCLUDED THEREIN AND ISE SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. ISE MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY UBS, OWNERS OF THE SECURITIES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR ANY DATA INCLUDED THEREIN. ISE 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 OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL ISE HAVE ANY LIABILITY FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN ISE AND UBS.
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