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UBS launches twelve ETRACS exchange traded notes linked to the CBOE volatility (VIX) Index
SIX ETRACS S&P 500 VIX FUTURES ETNS AND SIX ETRACS DAILY SHORT S&P 500 VIX FUTURES ETNS
UBS Investment Bank announced that today is the first day of trading on the NYSE Arca for twelve new ETRACS Exchange Traded Notes (ETNs) linked to the daily performance of a particular index in the S&P 500 VIX Futures Index Series (each, an Index and collectively, the Indices). Investors now have the ability to trade, be it long or short, six specific VIX Index futures maturities, ranging from one month to six months.
Each of the six ETRACS S&P 500 VIX Futures ETNs (the Long ETNs) provides investors with a long exposure to one of six underlying Indices, depending on the series of ETNs purchased. Each of the six ETRACS Daily Short S&P 500 VIX Futures ETNs (the Short ETNs) provides investors with a short exposure to one of six underlying Indices. The tickers for the Long and Short ETNs, as well as their constant maturities, are provided below.
Previously, there were limited alternatives for trading different maturities along the VIX futures curve. Investors now have the ability to trade six individual VIX futures maturities, be it long or short, based on their specific view on volatility, said Christopher Yeagley, Managing Director and US Head of Equity Structured Products. Welcome to the next generation of volatility investing.
About the Indices
Each of the six Long ETNs is linked to the daily performance of a particular index in the S&P 500 VIX Futures Index Series, reduced by investor fees. Each Index underlying the Long ETNs is a total return index and is composed of futures contracts on the VIX Index having a constant weighted average maturity ranging from one month to six months, depending on the series of the ETNs purchased, plus an interest component linked to the 91-day Treasury Bill rate.
Each of the six Short ETNs is linked to the inverse daily performance of the relevant Index, reduced by investor fees. Each Index underlying the Short ETNs is an excess return index and is composed of futures contracts on the VIX Index having a constant weighted average maturity ranging from one month to six months, depending on the series of the ETNs purchased.
All the underlying Indices are rolling Indices, each of which rolls on a daily basis according to a pre-determined schedule that has the effect of keeping constant the weighted average maturity of the underlying futures contracts.
For further information about ETRACS ETNs go to http://www.etracs.com. Exchange Traded Access Securities, ETRACS, are exchange-traded notes, or ETNs, 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. ETNs 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, 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 24 other ETRACS ETNs:
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 offering of the ETRACS ETNs) with the Securities and Exchange Commission (the SEC) for the offering 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).
Notes to Editors
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