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.
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