ETRACS Monthly Pay 2xLeveraged Closed-End Fund ETN Series B

  • Current Indicative Value
  • 01/24/2020 | 07:00 pm
  • USD 14.59
  • Current Spot Price USD 14.61
  • 01/24/2020 | 07:00 pm

Key Considerations




Selected risk considerations:

An investment in the ETRACS ETNs involves risks. Selected risks are summarized here, but we urge you to read the more detailed explanation of risks described in the "Risk Factors" section of the prospectus supplement for the ETRACS ETNs (the "ETRACS Prospectus"). Capitalized terms used below but not defined herein shall have the meanings attributed to them in the ETRACS Prospectus.

  • You may lose some or all of your investment - The ETNs do not guarantee any return on your initial investment and are exposed to two times any monthly decline in the level of the Index. If the monthly compounded leveraged return of the Index is insufficient to offset the combined negative effect of the Accrued Fees and Redemption Fee, if applicable (less any Coupon Amounts and the Stub Reference Distribution Amount, if any, you may be entitled to receive), or if the monthly compounded leveraged return of the Index is negative, you may lose some or all of your investment at maturity or call, or upon early redemption or acceleration.
  • Correlation and compounding risk — A number of factors may affect the ETN’s ability to achieve a high degree of correlation with the performance of the Index, and there can be no guarantee that the ETN will achieve a high degree of correlation. Because the Current Principal Amount is reset monthly, you will be exposed to compounding of monthly returns. As a result, the performance of the ETNs for periods greater than one month is likely to be either greater than or less than the Index performance times the leverage factor of two, before accounting for Accrued Fees and the Redemption Fee, if any. In particular, significant adverse monthly performances of your ETNs may not be offset by subsequent beneficial monthly performances of equal magnitude.
  • Leverage risk — The ETNs are two times leveraged long with respect to the Index, which means that you may benefit two times from any positive, but will be exposed to two times any negative, monthly performance of the Index, before accounting for the Accrued Fees and Redemption Fee, if any.
  • Market risk — The return on the ETNs, which may be positive or negative, is linked to the monthly compounded leveraged return on the Index as measured by the Index Factor, and which, in turn, is affected by a variety of market and economic factors, interest rates in the markets and economic, financial, political, regulatory, judicial or other events that affect the Index Constituent ETNs or the markets generally.
  • Credit of issuer — The ETNs are senior unsecured debt obligations of the issuer, UBS, and are not, either directly or indirectly, an obligation of or guaranteed by any third party. Any payment to be made on the ETNs, including any payment at maturity or call, or upon acceleration or upon early redemption, depends on the ability of UBS to satisfy its obligations as they come due. As a result, the actual and perceived creditworthiness of UBS will affect the market value, if any, of the ETNs prior to maturity or call, or upon acceleration or upon early redemption. In addition, in the event UBS were to default on its obligations, you may not receive any amounts owed to you under the terms of the ETNs. Unlike the series of UBS AG debt ETNs entitled “Medium-Term Notes, Series A,” the ETNs do not benefit from any co-obligation of UBS Switzerland AG.
  • You are not guaranteed a coupon payment — You will not receive a coupon payment on a Coupon Payment Date if the Reference Distribution Amount for your series of ETNs is zero. Because the amount of any Coupon Amount is uncertain and could be zero, you should not expect to receive regular periodic coupon payments.
  • Risks associated with closed-end funds - Investments in closed-end funds involve certain risks.  Because the ETNs are linked to the performance of an index of closed-end funds, you should carefully consider the risks associated with investments in closed-end funds described in the "Risk Factors" section of the pricing supplement for the ETNs.
  • A trading market for the ETNs may not develop — Although we intend to list each series of the ETNs on NYSE Arca, a trading market for the ETNs may not develop. Certain affiliates of UBS may engage in limited purchase and resale transactions in the ETNs of any series, although they are not required to and may stop at any time. We are not required to maintain any listing of any series of the ETNs on NYSE Arca or any other exchange. In addition, we are not obliged to, and may not, sell the full aggregate stated principal amount of any series of the ETNs shown on the cover of the applicable pricing supplement. We may issue and sell additional ETNs from time to time and we may suspend or cease sales of the ETNs at any time, at our discretion. Therefore, the liquidity of any series of the ETNs may be limited.
  • The ETNs may not provide a hedge against price and/or value decreases or increases — The ETNs may not provide a hedge against a decrease or increase in the price and/or value of any asset, sector or index.
  • Limited Performance History - The Index was created on April 11, 2013. As a result, the Index has a limited performance history. It is uncertain how the Index will perform in the future.
  • Requirements upon early redemption — You must satisfy the requirements described herein and in the applicable pricing supplement for your redemption request to be considered, including the minimum redemption amount of at least 50,000 of the same series of the ETNs for UBS to repurchase your ETNs, unless we determine otherwise or your broker or other financial intermediary bundles your ETNs for redemption with those of other investors (and of the same series) to reach this minimum requirement and there can be no assurance that they can or will do so. Therefore, the liquidity of the ETNs may be limited. In addition, the payment you receive upon early redemption will be reduced by the Redemption Fee Amount.
  • Your redemption election is irrevocable — You will not know the Redemption Amount at the time you elect to request that we redeem your ETNs and you will not be able to rescind your election
  • Potential automatic acceleration - In the event the indicative value of the ETNs is equal to $5.00 or less on any Trading Day or decreases 60% in value from the closing indicative value of the ETNs on the previous Monthly Valuation Date, the ETNs will be automatically accelerated and mandatorily redeemed by UBS and you will receive a cash payment equal to the Acceleration Amount as determined during the applicable Measurement Period. The Acceleration Amount you receive on the Acceleration Settlement Date may be significantly less than $5.00 per ETN and may be zero if the price of the ETNs continues to decrease during trading on one or more Trading Days during such Measurement Period.
  • Uncertain tax treatment - Significant aspects of the tax treatment of the ETNs are uncertain. You should consult your own tax advisor about your own tax situation.
  • Owning the ETNs is not the same as owning the Index constituents - The return on your ETNs may not reflect the return you would realize if you actually owned any of the CEFs underlying the Index or the ETNs or other financial products underlying the CEFs.
  • UBS’s Call Right - UBS may redeem all outstanding ETNs at any time on or after November 12th, 2019, as described under “General Terms of the Securities - UBS’s Call Right” in the ETRACS Prospectus. If UBS exercises its Call Right, the Call Settlement Amount may be less than the Principal Amount of your ETNs.