UBS expands suite of income yielding products with 2 ETRACS ETNS

The 2 new ETRACS Monthly Pay 2xLeveraged ETNs are designed to provide:

• 2x leveraged exposure to the Index(s), less fees, making them the only exchange-traded products with leveraged exposure to these indexes.
• Monthly leverage resetting, which provides an innovative alternative to daily leverage resetting typically used in other leveraged products
• Significant income potential in the form of variable monthly coupons linked to 2 times the dividends, if any, on the index constituents.
• Convenience of a single exchange-traded security.

“Enhanced yield potential and monthly distributions are key differentiators of our latest ETRACS offering” said Chris Yeagley, Managing Director and US Head of Equity Structured Products. “Yield-oriented investors now have access to these innovations in convenient exchange-traded securities.”

About the Underlying Indexes

Dow Jones U.S. Select Dividend Index^SM

This index represents the top U.S. stocks as measured by dividend yield, selected annually and subject to screening and buffering criteria.

The Index is weighted by the indicated annual dividend of its components where the weight of any individual company is restricted to 10%. The Index is a price return index (i.e., the reinvestment of dividends is not reflected in the Index). Any cash distributions on the Index constituents, less any withholding taxes, are reflected in the variable monthly coupon that may be paid to investors of the ETN.

In order for a company to be eligible for selection to the Index, it must (i) be a dividend-paying company in the Dow Jones U.S. Index^SM that has a non-negative historical five-year dividend-per-share growth rate; (ii) have a five-year average dividend to earnings-per-share ratio of less than or equal to 60%; (iii) have paid dividends in each of the previous five years and (iv) have a three-month minimum average daily trading volume of 200,000 shares. Current Index components are eligible for selection regardless of their payout ratio or trading.

S&P High Yield Dividend Aristocrats Index

The Index is weighted by the indicated annual dividend yield with constituents re-weighted every quarter and the constituent universe reviewed every December. The index methodology incorporates minimum market capitalization and liquidity criteria, as well as buffers to reduce turnover at index rebalancings. Modifications are made to stock weights to ensure no stock represents more than 4% of the index weight, and to enhance index basket liquidity at each quarterly rebalancing. Companies included in the Index come from a broad spectrum of industries. The Index is a price return index (i.e., the reinvestment of dividends is not reflected in the Index). Any cash distributions on the Index constituents, less any withholding taxes, are reflected in the variable monthly coupon that may be paid to investors of the ETN).