HDLVETRACS Monthly Pay 2xLeveraged U.S. High Dividend Low Volatility ETN
HDLV Fund Description
HDLV tracks an index of 40 stocks that have been culled from a list of the 1,000 largest US firms based primarily on high dividends and low volatility.
HDLV Factset Analytics Insight
HDLV's thesis may seem counterintuitive at first—leverage and low-volatility don't typically go together—but the note is primarily an income play. From the 1000 largest stocks, HDLV's index screens out all but 80 names with the highest expected yield based on analyst estimates. From these 80 high-yield names, it selects 40 with lower volatility over the past year. Seen in this context, the low-vol screen simply aims to dampen the risk of picking stocks with the juiciest yield—risk that woul be amplified by the note’s leverage. The portfolio is weighted by liquidity. HDLV pays a monthly coupon—unusual for an ETN. It also resets its leverage monthly rather than daily, making it suitable for long-term positions, though investors will still face compounding effects over longer periods. HDLV isn't cheap to own, and lukewarm liquidity further raises round-trip costs. Low assets elevate the risk of closure; ETNs rarely close outright, but they sometimes delist, requiring an OTC trade to exit the position. Like all ETNs, HDLV is not directly backed by stocks but by the credit of the issuing bank—UBS in this case. Another ETN byproduct: coupons are taxed as ordinary income, not qualified dividends.
HDLV CHARTS AND PERFORMANCE
HDLV Portfolio Data
HDLV Index Data
HDLV Fund Structure
HDLV Tax Exposures
HDLV Factset Analytics Block Liquidity
This measurement shows how easy it is to trade a $1 million USD block of HDLV. HDLV is rated a N/A out of 5.