UBS Offers Exchange-Traded Note Tied to Closed-End Fund Index

UBS AG (UBS) is selling an exchange-traded note tied to an index of 30 closed-end funds picked for yielding dividends.

The ETRACS Monthly Pay 2xLeveraged Closed-End Fund ETN (CEFL) started trading today under the ticker CEFL, according to data compiled by Bloomberg. The bank charges 0.5 percent in annual fees and a financing rate of 0.4 percent above the three-month U.S. dollar London interbank offered rate, according to a prospectus filed with the U.S. Securities and Exchange Commission.

The ETN tracks twice the gains and losses of the ISE High Income Index, a benchmark of funds from the BlackRock Enhanced Equity Dividend Trust (BDJ) to the AllianceBernstein Income Fund, according to the prospectus.

Megan Stinson, a spokeswoman for the bank in New York, declined to comment.

UBS sells 31 other ETNs in the U.S. with about $3.5 billion in assets, Bloomberg data show.

To contact the reporter on this story: Kevin Dugan in New York at kdugan4@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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