Leveraged High Div ETN Debuts

November 13, 2018

UBS launched this week another member of its ETRACS family of ETNs. The ETRACS Monthly Pay 2xLeveraged US Small Cap High Dividend ETN Series B (SMHB) is essentially a later-maturing version of the ETRACS Monthly Pay 2xLeveraged US Small Cap High Dividend ETN (SMHD), which has a maturity date of Feb. 6, 2045.

SMHB, which matures on Nov. 10, 2048, comes with an expense ratio of 0.85% and lists on the NYSE Arca exchange.

SMHB tracks the Solactive U.S. Small Cap High Dividend Index, which covers U.S. small-cap stocks with the highest expected dividend yield for the following 12 months, based on analyst estimates.

Essentially, SMHB is an identical product to its counterpart SMHD, but with a different starting point and maturity. With leveraged funds, that can make a big difference given how returns are compounded.

Contact Heather Bell at [email protected]

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