UBS expands suite of MLP ETNs with launch of ETRACS Alerian MLP Index ETN (AMU)

Jul 23rd, 2012 | By | Category: Alternatives / Multi-Asset

UBS, the Switzerland-headquartered investment bank, has expanded its suite of exchange-traded products based on Master Limited Partnerships (MLPs) with the launch of the UBS ETRACS Alerian MLP Index ETN (AMU).

UBS expands suite of MLP ETNs with launch of the UBS ETRACS Alerian MLP Index ETN (AMU)

The UBS ETRACS Alerian MLP Index ETN (AMU) provides exposure to a composite of 50 publicly-traded energy MLPs.

The Exchange Traded Note (ETN) has been listed on the NYSE Arca and is linked to the Alerian MLP Index, a composite of 50 publicly-traded energy MLPs.

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.

The Alerian MLP Index provides investors with a comprehensive benchmark for this emerging asset class, and is calculated using a float-adjusted, capitalisation-weighted methodology.

The index’s top five constiuents are Enterprise Products Partners, Kinder Morgan Energy Partners, Plains All American Pipeline, Energy Transfer Equity and Magellan Midstream Partners.

AMU offers investors 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. The current index yield is 5.87%.

“MLPs continue to be a highly-favoured 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.”

AMU has a management fee of 0.80% per annum.

AMU is the sixth MLP-based ETN in the ETRACS suite. Others in the suite include the ETRACS Alerian MLP Infrastructure Index ETN (MLPI), the ETRACS Alerian Natural Gas MLP Index ETN (MLPG), and the ETRACS Wells Fargo MLP Index ETN (MLPW).

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