UBS Rolls Out 1X, 2X Internet IPO ETNs
July 21, 2011
UBS, the Swiss bank famous for private-client wealth management, launched a pair of exchange-traded notes today focused on Internet-related initial public offerings—one with single exposure and the other serving up double exposure—that could give investors a way to play the latest Internet IPO craze.
The ETRACS Internet IPO ETN (NYSEArca: EIPO) and the Monthly 2xLeveraged ETRACS Internet IPO ETN (NYSEArca: EIPL) are both based on an index that provides exposure to Internet companies that have been listed on either the New York Stock Exchange or Nasdaq for less than three years.
Internet-related companies such as LinkedIn and Pandora have held quite successful IPOs in the past year, drawing watered-down comparisons to the heyday of the tech bubble. Their prices either jumped after the IPO or were priced far above expected ranges. Looking ahead, many have high hopes companies like Groupon, Zynga and especially Facebook or Twitter will also have splashy IPOs.
The two ETNs both come with an annual expense ratio of 0.65 percent, according to information posted on UBS’ website.
As its name suggests, the double-exposure ETN will rebalance monthly, making it more like the family of Deutsche Bank ETNs marketed by Invesco PowerShares than the daily-rebalanced leveraged ETFs sponsored by ProShares or Direxion.