ETRACS 2x Leveraged MSCI US Minimum Volatility Factor TR ETN (USML)

Overview

The ETRACS 2x Leveraged MSCI US Minimum Volatility Factor TR ETN (UVMV) is an exchange-traded note that seeks to provide investors with a leveraged return based on the performance of the MSCI US Minimum Volatility Index. It aims to deliver twice the daily performance of the index, which selects stocks with the lowest volatility characteristics from the US equity market. This ETN employs leverage to amplify both gains and losses.

Reputation and Reliability

UBS is a global financial services company with a long-standing reputation. ETNs, however, carry issuer risk, making UBS's creditworthiness a factor.

Management Expertise

UBS has extensive experience in managing and structuring financial products. The management team leverages quantitative strategies and risk management to deliver the leveraged returns.

Goal

To seek 2x leveraged participation in the daily performance of the MSCI US Minimum Volatility Index Total Return.

Investment Approach and Strategy

Strategy: This ETN aims to provide leveraged exposure to the MSCI US Minimum Volatility Index, which is composed of US equities exhibiting lower volatility than the broader market. The 2x leverage seeks to amplify the daily returns of the index.

Composition The ETN's performance is linked to the MSCI US Minimum Volatility Index, which primarily holds US stocks. The composition changes over time as the index rebalances and adjusts to maintain its minimum volatility characteristics.

Market Share: UVMV has a relatively small market share compared to unleveraged minimum volatility ETFs and broad market leveraged ETFs.

Total Net Assets (AUM): 19855119

Key Competitors

• SPLV
• USMV
• XSLV
• ROM
• LGLV

Competitive Landscape

The competitive landscape is dominated by unleveraged minimum volatility ETFs like USMV and SPLV. UVMV faces competition from other leveraged and minimum volatility ETFs. Its advantage is the potential for amplified returns, but it carries higher risk and is more sensitive to daily market fluctuations than its competitors.

Historical Performance: Historical performance data is unavailable due to delisting.

Benchmark Comparison: Performance relative to the MSCI US Minimum Volatility Index depends on the tracking error and the effects of leverage, which amplifies both positive and negative returns. Data is unavailable due to delisting.

Expense Ratio: 0.95

Average Trading Volume

The average trading volume before delisting was relatively low, potentially increasing transaction costs and impacting order execution.

Bid-Ask Spread

The bid-ask spread before delisting could be wider than more liquid ETFs, adding to the cost of trading.

Market Environment Factors

Economic conditions, interest rates, and overall market sentiment influence the performance of the underlying index. Volatility in the market can significantly impact the performance of the leveraged ETN.

Growth Trajectory

The growth trajectory depends on the sustained outperformance of the minimum volatility factor and the effective management of leverage. Data is unavailable due to delisting.

Competitive Edge

UVMV's competitive edge lies in its 2x leverage, offering the potential for higher returns compared to unleveraged minimum volatility ETFs. It caters to investors seeking amplified exposure to the low-volatility factor. However, this leverage comes with increased risk and potential for greater losses. The strategy is suitable for those who have a high risk tolerance and sophisticated understanding of leveraged products.

Volatility

The ETN's volatility is significantly higher than the underlying index due to the 2x leverage. Daily fluctuations are amplified, increasing the risk of substantial losses.

Market Risk

Market risk is amplified due to leverage. Additionally, ETNs carry issuer risk, exposing investors to potential losses if the issuer's creditworthiness deteriorates. Minimum volatility strategies might underperform during periods of high growth.

Ideal Investor Profile

The ideal investor is sophisticated with a high risk tolerance and a short-term investment horizon. They understand the mechanics of leveraged ETFs/ETNs and are comfortable with significant daily fluctuations. This product is not suitable for buy-and-hold investors.

Market Risk

UVMV is best suited for active traders seeking short-term tactical exposure to the minimum volatility factor and willing to accept high levels of risk.

UVMV was a 2x leveraged ETN that tracked the MSCI US Minimum Volatility Index, offering the potential for amplified returns but also amplified losses. It catered to sophisticated investors with a short-term focus and high risk tolerance. The ETN's leverage made it highly sensitive to market volatility and issuer risk. Investors should be aware of the risks associated with leveraged products before investing. Note: This ETN has been delisted, and therefore, it is no longer available for investment.

Data Sources:

• ETF.com
• Yahoo Finance
• Issuer's Prospectus (prior to delisting)
• MSCI Index Fact Sheet

Disclaimers:

The information provided is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investing in leveraged ETFs/ETNs involves significant risks, including the potential loss of principal. Due to delisting, some data may be unavailable or outdated. Consult with a financial advisor before making any investment decisions.