Ubs launches exchange-traded note with significant monthly income potential and 2x leveraged exposure to a diversified, multi-asset index

Ubs launches exchange-traded note with significant monthly income potential and 2x leveraged exposure to a diversified, multi-asset index: ETRACS Monthly Pay 2xLeveraged Diversified High Income ETN…

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UBS Investment Bank announced that 11/13/2013 is the first day of trading on the NYSE Arca® for the ETRACS Monthly Pay 2xLeveraged 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.   
DVHL Profile
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
DVHL Offers Investors:
–  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.).
“We are very excited about the NYSE Diversified High Income Index,” said Paul Somma, Senior ETRACS Structurer. “Since its inception, the index has delivered attractive returns and significant yields from a highly diversified asset pool.  DVHL provides investors with 2x access to this compelling index that marries significant income potential and diversification, and further cements ETRACS’ reputation as a leading innovator of income-generating products.”
About the NYSE® Diversified High Income Index
The 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.
Top 10 Index Constituents  
Name  Ticker  Sector – % Weight
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: ETFWorld – Ubs

WMCR
Wilshire Micro-Cap ETF (based on the Wilshire US Micro-Cap Index)