DJ-UBS Commodity Index 2-4-6 Blended Futures
The DJ-UBS Commodity Index 2-4-6 Blended Futures ETN (the "ETN") is designed to give exposure to the Index, which provides diversified exposure across multiple commodity futures maturities. The Index seeks to limit concentration at any one point on the commodity futures price curves. Historically, including exposure to longer dated maturities has helped to mitigate the costs associated with holding and rolling shorter dated commodity futures positions.
The Index was created on December 15, 2011 and has no performance history prior to that date.
||ETRACS DJ-UBS Commodity Index 2-4-6 Blended Futures
||Dow Jones -UBS Commodity Index 2-4-6 Forward Blend Total ReturnSM
|Initial Trade Date
||April 25, 2012
||April 30, 2042
|Fee Amount (%)*
||0.70% per annum, accrued on a daily basis
* As of April 25, 2012. See 'Risk considerations' as well as the 'Important legal information specific to ETRACS ETN's link below for more information
||20 Day Volume Average
|High (52 week)
|Low (52 week)
||Daily Indicative Value
Updated on: May 21, 2013
Target weights - DJ-UBS Commodity Index TR
|WTI Crude Oil
|Brent Crude Oil
As of February 2012
Source: Dow Jones
Source: UBS Investment Bank as of April 26, 2012
An investment in the ETRACS ETN involves risks. Selected risks
are summarized here, but we urge you to read the more detailed
explanation of risks described in the "Risk Factors" section of the
prospectus supplement for the ETNs (the "ETRACS Prospectus").
Capitalized terms used below (and elsewhere in this document) but
not defined herein shall have the meanings attributed
to them in the ETRACS Prospectus.
- You may lose some or all of your principal - The ETNs are fully exposed to any decline in the level of the Index. Because the cumulative negative effect of the Fee Amount and any Redemption Fee reduces your final payment, the change in the Index Closing Level over the term of the ETNs will need to be sufficient to offset the cumulative negative effect of the Fee Amount and any Redemption Fee in order for you to receive a payment at maturity equal to your initial investment in the ETNs. The Index is volatile and subject to a variety of market forces, some of which are described below. The Index Closing Level is therefore unpredictable. Commodity prices may change unpredictably, affecting the prices of the exchange-traded futures contracts comprising the Index and, consequently, the value of the ETNs.
- The Index may not perform as designed - Although the Index seeks to limit concentration at any one point on the commodity futures price curve by diversifying exposure across multiple commodity futures maturities, and thus helping to mitigate the costs associated with holding and rolling shorter dated commodity futures positions, there is no assurance that this strategy will be successful and that any reduction in costs will be achieved.
- Market risk - The return on the ETNs, which may be positive or negative, is directly linked to the performance of the Index as measured by the Daily Index Factor, which is based on a variety of market and economic factors, interest rates in the markets and economic, financial, political, regulatory, judicial or other events that affect the markets generally
- Credit of UBS - The ETNs are senior unsecured debt obligations of the issuer, UBS, and are not, either directly or indirectly, an obligation of or guaranteed by any third party. Any payment to be made on the ETNs, including any payment at maturity or call, upon acceleration or upon early redemption, depends on the ability of UBS to satisfy its obligations as they come due. As a result, the actual and perceived creditworthiness of UBS will affect the market value, if any, of the ETNs prior to maturity or call, upon acceleration or upon early redemption. In addition, in the event UBS were to default on its obligations, you may not receive any amounts owed to you under the terms of the ETNs.
- Potential over-concentration in particular commodity sectors - The commodities underlying the futures contracts included in the Index are concentrated in a limited number of sectors, particularly energy and agriculture, and may therefore carry risks similar to a concentrated ETNs investment in a limited number of industries or sectors.
- A trading market for the ETNs may not develop - Although the ETNs have been approved for listing on the NYSE Arca, subject to official notice of issuance, a trading market for the ETNs may not develop. Certain affiliates of UBS may engage in limited purchase and resale transactions in the ETNs, although they are not required to and may stop at any time. We are not required to maintain any listing of the ETNs on the NYSE Arca or any other exchange. In addition, we are not obliged to, and may not, sell the full aggregate principal amount of the ETNs. We may suspend or cease sales of the ETNs at any time, at our discretion. Therefore, the liquidity of the ETNs may be limited.
- No interest payments on the ETNs - You will not receive any interest payments on the ETNs.
- No direct exposure to fluctuations in foreign exchange rates - The value of your ETNs will not be adjusted to compensate for exchange rate fluctuations between the U.S. dollar and any other currencies in which any futures contacts comprising the Index may be quoted. Therefore, if any applicable non-U.S. dollar currencies appreciate or depreciate relative to the U.S. dollar over the term of the ETNs, you will not receive any additional payment at maturity or call, upon acceleration or upon early redemption, nor incur any reduction in such potential payment.
- The ETNs may not provide a hedge against commodity price and/or value decreases - The ETNs may not provide a hedge against a decrease in the price and/or value of the commodities included in the index.
- Limited performance history - The return on the ETNs is linked to the performance of the Index, as measured by the Daily Index Factor. The Index was created on December 15, 2011. As a result, the Index has a limited performance history and it is uncertain how the Index will perform in the future.
- No redemption prior to May 7, 2012 - You may elect to have your ETNs redeemed on or after May 7, 2012. Accordingly, your ability to liquidate the ETNs may be limited prior to that date.
- Minimum Redemption Amount - You must elect to redeem at least 50,000 ETNs for UBS to repurchase your ETNs, unless we determine otherwise or your broker or other financial intermediary bundles your ETNs for redemption with those of other investors to reach this minimum requirement and there can be no assurance that they can or will do so. Therefore, the liquidity of the ETNs may be limited.
- Your Redemption Election is Irrevocable - You will not be able to rescind your election to redeem your ETNs after your redemption notice is received by UBS. Accordingly, you will be exposed to market risk in the event market conditions change after UBS receives your offer and the Redemption Amount is determined on the applicable Valuation Date.
- Potential automatic acceleration - In the event the indicative value of the ETNs on any Trading Day (i) equals $5.00 or less or (ii) decreases in value at least 60% as compared to the closing indicative value on the previous Trading Day, all issued and outstanding ETNs will be automatically accelerated and mandatorily redeemed by UBS and you will receive a cash payment equal to the Cash Settlement Amount even if the indicative value subsequently increases on that day.
- Owning the ETNs is not the same as owning any of the
futures contracts included in the Sub-Indices - The return on your ETNs may not reflect the return you would realize if you actually owned any of the exchange-traded futures contracts included in the Sub-Indices.
- Uncertain tax treatment - Significant aspects of the tax treatment of the ETNs are uncertain. You should consult your own tax advisor about your own tax situation.
UBS's Call Right - UBS may redeem all outstanding ETNs at any
time after April 30, 2013 as described in the ETRACS Prospectus.
UBS has filed a registration statement (including a prospectus, as supplemented by a prospectus supplement for each offering of the ETRACS ETNs) with the Securities and Exchange Commission (the "SEC") for the offerings to which this communication relates. Before you invest, you should read these documents and any other documents that UBS has filed with the SEC for more complete information about UBS and the offerings to which this communication relates. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, you can request the prospectus and any applicable prospectus supplement by calling toll-free (+1-877-387 2275).
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