The ETRACS Alerian MLP Index ETN (the “ETN”) offers investors:
- Access to the popular Alerian MLP Index (NYSE: AMZ).
- Exposure to a portfolio of 50 energy Master Limited Partnerships (“MLPs”) through a single, exchange-traded security.
- Income potential in the form of a variable quarterly coupon linked to the cash distributions, if any, on the MLPs in the Index, less investor fees.1
- Straightforward tax administration, as the coupons associated with the ETN are reported as ordinary income on Form 1099, therefore eliminating the administrative burden associated with K-1 tax forms.2
“MLPs continue to be a highly-favored asset for investors seeking attractive yields and relatively low correlation to other asset classes,” said Christopher Yeagley, Managing Director and US Head of Equity Structured Products. “So we are particularly excited to once again partner with Alerian, a market leader in the MLP space, to offer an ETN linked to their popular Alerian MLP Index.”
MLPs are limited partnerships primarily engaged in the exploration, marketing, mining, processing, production, refining, storage, or transportation of any mineral or natural resource. Because the MLP structure requires the distribution of at least 90% of an MLP’s income to its investors, MLPs typically have higher yields than regular dividend paying stocks.
About the Alerian MLP Index
The Index is a composite of 50 publicly-traded energy MLPs. The Index provides investors with a comprehensive benchmark for this emerging asset class. The Index is calculated using a float-adjusted, capitalization-weighted methodology and is disseminated in real-time on a price-return basis (NYSE: AMZ).
Number of holdings: 50 MLPs
|Top 10 Holdings|
|Enterprise Products Partners LP||EPD||15.46%|
|Kinder Morgan Energy Partners LP||KMP||9.59%|
|Plains All American Pipeline LP||PAA||6.68%|
|Energy Transfer Equity LP||ETE||4.83%|
|Magellan Midstream Partners LP||MMP||4.44%|
|Energy Transfer Partners LP||ETP||4.44%|
|Linn Energy LLC||LINE||4.10%|
|ONEOK Partners LP||OKS||3.84%|
|Kinder Morgan Management LLC||KMR||3.73%|
|Enbridge Energy Partners LP||EEP||3.20%|
|Source: Alerian; as of June 15, 2012 quarterly rebalancing|
|1 You are not guaranteed any coupon or distribution amount under the ETNs.|
|2 You should consult your own tax advisor about your tax situation. Significant aspects of the tax treatment of the ETNs are uncertain.|
For further information about ETRACS ETNs, go to http://www.etracs.com.
ETRACS ETNs (the “ETRACS ETNs”), are exchange-traded notes, an innovative class of investment products offering access to markets and strategies that may not be readily available to investors, and offer unique diversification opportunities in a number of different sectors. ETRACS ETNs may offer:
- Access to asset classes with historically low correlations to more traditional asset classes
- Convenience of an exchange-traded security
- Transparent exposure to a published index
ETRACS ETNs are senior unsecured notes issued by UBS AG, are traded on NYSE Arca, and can be bought and sold through a broker or financial advisor. An investment in ETRACS ETNs is subject to a number of risks, including the risk of loss of some or all of the investor’s principal, and is subject to the creditworthiness of UBS. You are not guaranteed any coupon or distribution amount under the ETNs. We urge you to read the more detailed explanation of risks described under “Risk Factors” in the prospectus supplement for the ETRACS ETN.
This material is issued by UBS AG or an affiliate thereof ("UBS"). Products and services mentioned in this publication may not be available for residents of certain jurisdictions. Past performance is not necessarily indicative of future results. Please consult the restrictions relating to the product or service in question for further information. Activities with respect to US securities are conducted through UBS Securities LLC, a US broker/dealer. Member of SIPC (http://www.sipc.org/).
ETRACS ETNs are sold only in conjunction with the relevant offering materials. UBS has filed a registration statement (including a prospectus, as supplemented by a prospectus supplement for the offering of the ETRACS ETNs) with the Securities and Exchange Commission (the "SEC") for the offering to which this communication relates. Before you invest, you should read these documents and any other documents that UBS has filed with the SEC for more complete information about UBS and the offering to which this communication relates. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, you can request the prospectus and the applicable prospectus supplement by calling toll-free (+1-877-387 2275). In the US, securities underwriting, trading and brokerage activities and M&A advisor activities are provided by UBS Securities LLC, a registered broker/dealer that is a wholly owned subsidiary of UBS AG, a member of the New York Stock Exchange and other principal exchanges, and a member of SIPC. UBS Financial Services Inc. is a registered broker/dealer and affiliate of UBS Securities LLC.
UBS specifically prohibits the redistribution or reproduction of this material in whole or in part without the prior written permission of UBS and UBS accepts no liability whatsoever for the actions of third parties in this respect. © UBS 2012. The key symbol, UBS and ETRACS are among the registered and unregistered trademarks of UBS. Alerian MLP Index, Alerian MLP Total Return Index, AMZ, and AMZX are trademarks of Alerian and their use is granted under a license from Alerian. Other marks may be trademarks of their respective owners. All rights reserved.
Notes to Editors
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