ETF Watch: 2X MLP ETN Launches

Credit Suisse rolls out another MLP-linked ETN.

ETF.com
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Reviewed by: etf.com Staff
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Edited by: etf.com Staff

Today Credit Suisse rolled out a leveraged ETN tied to the Alerian MLP Index. The Credit Suisse X-Links Monthly Pay 2xLeveraged Alerian MLP Index ETN (AMJL) offers twice the monthly return of its benchmark, including a monthly coupon amount that is equal to two times the net cash dividends or distributions of the index’s components.

AMJL charges a tracking rate of 0.85%, according to the prospectus.

UBS offers a similar ETN, the Etracs 2xMonthly Leveraged S&P MLP Index ETN Series B (MLPZ) with nearly $50 million in assets under management. MLPZ comes with an expense ratio of 0.95%.

AMJL joins two other unleveraged Credit Suisse MLP ETNs, the Credit Suisse S&P MLP Index ETN (MLPO), with $77 million in assets under management, and the Credit Suisse X-Links Cushing MLP Infrastructure ETN (MLPN), with $461 million in assets.

Swaps Fund To Close

ProShares will shut down one of its more unusual products after today. The ProShares CDS North American HY Credit ETF (TYTE | F) may have simply been too obscure of a product for investors.

The one-of-a-kind fund essentially invests in credit derivatives tied to high-yield debt issuers. The index-based credit default swaps (CDS) that make up TYTE’s portfolio are represented by CDX indexes. When CDS rates decline—which means credit conditions are improvingthe CDX index goes up. As such, the fund longs credits by shorting CDS via long positions on CDX indexes.

ProShares launched TYTE in August 2014 alongside its counterpart, the ProShares CDS Short North American HY Credit ETF (WYDE), which essentially offers the inverse of TYTE’s exposure for investors who are bearish on the credit quality of the high-yield space. WYDE has $3.7 million in assets under management.

 

Contact Heather Bell at [email protected].

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