ETRACS 2x Leveraged US Dividend Factor TR ETN (SCDL)

Overview

The ETRACS 2x Leveraged US Dividend Factor TR ETN (DIVL) provides 2x leveraged exposure to the performance of the Solactive US Dividend Factor Index TR, focusing on dividend-paying U.S. equities.

Reputation and Reliability

The issuer, UBS, is a global financial services company. Their reputation is generally considered strong but is subject to the typical risks associated with large financial institutions.

Management Expertise

UBS has extensive experience managing various financial products including ETFs and ETNs.

Goal

The investment goal is to seek leveraged returns based on the Solactive US Dividend Factor Index TR, which tracks dividend-paying U.S. equities.

Investment Approach and Strategy

Strategy: The ETN provides 2x leveraged exposure to the underlying index, meaning it aims to double the daily percentage change of the index. The return of the ETN is linked to the performance of the index, less fees and expenses.

Composition The ETN's return is linked to the performance of the Solactive US Dividend Factor Index TR, which holds dividend-paying U.S. equities.

Market Share: DIVL's market share is relatively small within the leveraged ETF/ETN space.

Total Net Assets (AUM): 29000000

Key Competitors

• SDIV
• DVYL
• HDLV

Competitive Landscape

The competitive landscape includes several dividend-focused ETFs and ETNs. DIVL offers 2x leverage, differentiating it but also adding risk compared to non-leveraged options. Competitors like SDIV offer broader diversification but without leverage. Other ETFs may have lower expense ratios or different dividend weighting methodologies. DIVL's advantage lies in its leveraged exposure, but this also makes it more volatile and susceptible to losses.

Historical Performance: Historical performance is highly dependent on the underlying index and the leverage factor, experiencing amplified gains and losses relative to the index. Precise numerical historical return figures would be found in the fund's prospectus and fact sheets.

Benchmark Comparison: The ETF's performance should be compared against 2x the performance of the Solactive US Dividend Factor Index TR. Expect tracking errors due to fees, expenses, and leverage resets.

Expense Ratio: 0.85

Average Trading Volume

The average trading volume can vary, but generally is lower than non-leveraged broader ETFs, potentially increasing transaction costs.

Bid-Ask Spread

The bid-ask spread can fluctuate and widen during periods of market volatility or lower trading volume, increasing the cost of trading.

Market Environment Factors

The performance of DIVL is heavily influenced by interest rates, dividend yields in the U.S. equity market, and the overall economic outlook. Volatility in the dividend-paying sectors can also significantly impact its returns.

Growth Trajectory

The growth trajectory depends on the demand for leveraged dividend exposure and the performance of the underlying index; changes may involve adjustments to the tracked index's composition.

Competitive Edge

DIVLu2019s primary competitive advantage is its 2x leveraged exposure to a dividend factor index, offering potentially higher returns for investors willing to accept greater risk. This leverage is a key differentiator, targeting investors who seek amplified exposure to dividend-paying U.S. equities. However, this also leads to potentially greater losses. The fundu2019s success hinges on the consistent performance of the underlying dividend factor index and its ability to effectively maintain the 2x leverage ratio. DIVL would attract investors seeking outperformance during dividend stock rallies.

Volatility

Due to the 2x leverage, DIVL experiences significantly higher volatility compared to non-leveraged dividend ETFs.

Market Risk

The ETF is exposed to market risk related to dividend-paying U.S. equities and the risk of leveraged investments, which can amplify losses.

Ideal Investor Profile

The ideal investor is a sophisticated trader or investor with a high-risk tolerance, seeking short-term leveraged exposure to U.S. dividend stocks. They should understand the risks associated with leveraged ETNs, including the potential for rapid losses.

Market Risk

DIVL is suitable for active traders with a short-term investment horizon. It is generally not appropriate for long-term investors or those with a low-risk tolerance.

ETRACS 2x Leveraged US Dividend Factor TR ETN (DIVL) offers 2x leveraged exposure to the Solactive US Dividend Factor Index TR. It is best suited for short-term active traders with a high-risk tolerance seeking amplified returns from dividend-paying U.S. equities. The leverage magnifies both gains and losses, making it a volatile investment. Its performance depends heavily on the underlying index and the effective management of the leverage. Investors should carefully consider the risks before investing.

• SDIV
• DVYL
• HDLV
• MLPX
• FDL
• IDHD

Data Sources:

• UBS Website
• ETF.com
• Yahoo Finance
• Fund Prospectus

Disclaimers:

This analysis is for informational purposes only and does not constitute financial advice. Investment decisions should be based on your own research and risk tolerance. Leveraged ETFs/ETNs are complex products and may not be suitable for all investors.