UBS Launches ETN with High Monthly Income Potential and Leveraged Exposure to International Real Estate Securities (RWXL)

UBS Investment Bank announced that today is the first day of trading on the NYSE Arca for the ETRACS Monthly Pay 2xLeveraged Dow Jones International Real Estate ETN (NYSEArca:RWXL). RWXL is linked to the monthly compounded 2x leveraged performance of the Dow Jones Global ex-U.S. Select Real Estate Securities Index (the “Index”), reduced by investor fees.

RWXL offers investors:   

  • Monthly compounded 2x leveraged exposure to the Index, less fees, making it the only exchange-traded product with leveraged exposure to this index.     
  • Significant income potential in the form of a variable monthly coupon linked to 2 times the cash distributions, if any, on the Index constituents, less any withholding taxes.     
  • Global diversification resulting from 127 international real estate securities based in 22 countries.*     
  • Convenience of a single, USD-denominated, exchange-traded security and USD-denominated income.     

      * Constituent and country data as of February 29, 2012 and sourced from CME Group Index Services LLC.   

“This ETN is designed for investors who seek a high yield and are bullish on this Dow Jones international real estate index,” said       Christopher Yeagley, Managing Director and US Head of Equity Structured Products. “RWXL offers high monthly income potential, international diversification and leveraged exposure to the index, all by way of a single, USD-denominated, exchange-traded security.”   

RWXL Profile

            Income Potential         

                  

            Variable monthly coupon linked to 2 times the cash distributions, if any, on the Index constituents, less any withholding taxes         

            2x Index Yield*         

 

            7.60%         

            Underlying Index         

 

            Dow Jones Global ex-U.S. Select Real Estate Securities Index         

            Leverage         

 

            2x Leverage with Monthly Reset         

            Diversification         

 

            Index comprised of 127 international real estate securities based in 22 countries**         

            *         

                  

            Based on 2 times the Index dividend yield calculated in USD as of February 29, 2012 by CME Group Index Services LLC. Investors are not guaranteed any coupon or distribution.         

            **         

 

            Constituent and country data as of February 29, 2012 and sourced from CME Group Index Services LLC.         

                      

Top 10 Index Constituents*

                                                                                                                       

Index

Name

                                     

Country

                                     

Bloomberg Ticker

                                     

Weighting

          Westfield Group                      Australia                      WDC AU EQUITY <GO>                      6.46%       
          Unibail-Rodamco S.A.                      France                      UL FP EQUITY <GO>                      5.67%       
          Brookfield Asset Mgmt Inc. Cl A                      Canada                      BAM/A CN EQUITY <GO>                      5.62%       
          Mitsui Fudosan Co. Ltd.                      Japan                      8801 JP EQUITY <GO>                      5.37%       
          Land Securities Group PLC                      U.K.                      LAND LN EQUITY <GO>                      2.70%       
          Hang Lung Properties Ltd.                      Hong Kong                      101 HK EQUITY <GO>                      2.70%       
          Link Real Estate Investment Trust                      Hong Kong                      823 HK EQUITY <GO>                      2.68%       
          Westfield Retail Trust                      Australia                      WRT AU EQUITY <GO>                      2.50%       
          Hongkong Land Holdings Ltd.                      Singapore                      HKL SP EQUITY <GO>                      2.19%       
          British Land Co. PLC                      U.K.                      BLND LN EQUITY <GO>                      2.13%       

TOTAL

                                                                                                                                                       

38.02%

Source: CME Group Index Services LLC.

            * Data calculated in USD as of February 29, 2012.         

                  

Index Country Allocations*

          Australia                                                        17.86%       
          Japan                      17.22%       
          U.K.                      11.54%       
          Hong Kong                      10.35%       
          Canada                      10.18%       
          Singapore                      9.79%       
          France                      8.21%       
          Switzerland                      2.34%       
          Brazil                      2.06%       
          Austria                      1.75%       
          Philippines                      1.67%       
          Netherlands                      1.58%       
          Sweden                      1.47%       
          South Africa                      0.97%       
          Belgium                      0.84%       
          New Zealand                      0.77%       
          Malaysia                      0.52%       
          Thailand                      0.28%       
          Poland                      0.25%       
          Italy                      0.15%       
          Germany                      0.13%       
          Turkey                                                        0.08%       

Source: CME Group Index Services LLC.

            * Data calculated in USD as of February 29, 2012.         

About ETRACS

      For further information about ETRACS ETNs, go to http://www.etracs.com.   

      Exchange Traded Access Securities ETNs (“ETRACS ETNs”), are       exchange-traded notes, an innovative class of investment products       offering access to markets and strategies that may not be readily       available to investors, and offer unique diversification opportunities       in a number of different sectors. ETRACS ETNs may offer:   

  •         Access to asset classes with historically low correlations to more         traditional asset classes     
  •         Convenience of an exchange-traded security     
  •         Transparent exposure to a published index     

      ETRACS ETNs are senior unsecured notes issued by UBS AG, are traded on       NYSE Arca, and can be bought and sold through a broker or financial       advisor. An investment in ETRACS ETNs is subject to a number of       risks, including the risk of loss of some or all of the investor’s       principal, and is subject to the creditworthiness of UBS. You are not       guaranteed any coupon or distribution amount under the ETNs. We urge you       to read the more detailed explanation of risks described under “Risk       Factors” in the prospectus supplement for the ETRACS ETN.

      There are 41 ETRACS ETNs:   

ETRACS ETN Name

                                                        

Ticker

                  

Master             Limited Partnerships

            Alerian MLP Infrastructure         

     

            MLPI         

            2x Monthly Leveraged Long Alerian MLP Infrastructure         

     

            MLPL         

            1x Monthly Short Alerian MLP Infrastructure TR*         

     

            MLPS         

            Alerian Natural Gas MLP         

     

            MLPG         

            Wells Fargo MLP Index         

     

            MLPW         

                  

Business             Development Companies

            Wells Fargo Business Development Company Index         

     

            BDCS         

            2x Monthly Leveraged Wells Fargo Business Development         

     

            BDCL         

            Company Index         

     

                      

                  

Alpha             Strategies

            Long-Short S&P 500 VIX Futures         

     

            XVIX         

            Natural Gas Futures Contango ETN         

     

            GASZ         

            Oil Futures Contango ETN         

     

            OILZ         

                  

Hybrid

            S&P 500 Gold Hedged         

     

            SPGH         

            Fisher-Gartman Risk Off ETN         

     

            OFF         

            Fisher-Gartman Risk On ETN         

     

            ONN         

                  

Commodities

            CMCI TR         

     

            UCI         

            CMCI Agriculture TR         

     

            UAG         

            CMCI Energy TR         

     

            UBN         

            CMCI Food TR         

     

            FUD         

            CMCI Gold TR         

     

            UBG         

            CMCI Industrial Metals TR         

     

            UBM         

            CMCI Livestock TR         

     

            UBC         

            CMCI Long Platinum ER*         

     

            PTM         

            CMCI Short Platinum ER         

     

            PTD         

            CMCI Silver TR         

     

            USV         

            DJ-UBS Commodity Index TR         

     

            DJCI         

                  

Equities

            Next Generation Internet ETN         

     

            EIPO         

            Monthly 2xLeveraged Next Generation Internet ETN         

     

            EIPL         

            Long ISE Solid State Drive Index         

     

            SSDD         

            2xLeveraged Long ISE Solid State Drive Index         

     

            SSDL         

            Monthly 2xLeveraged ISE Cloud Computing TR         

     

            LSKY         

                  

Volatility

          Long-Short S&P 500 VIX Futures                        XVIX       
          Long 1-Month S&P 500 VIX Futures                        VXAA       
          Long 2-Month S&P 500 VIX Futures                        VXBB       
          Long 3-Month S&P 500 VIX Futures                        VXCC       
          Long 4-Month S&P 500 VIX Futures                        VXDD       
          Long 5-Month S&P 500 VIX Futures                        VXEE       
          Long 6-Month S&P 500 VIX Futures                        VXFF       
          Short 1-Month S&P 500 VIX Futures                        AAVX       
          Short 2-Month S&P 500 VIX Futures                        BBVX       
          Short 3-Month S&P 500 VIX Futures                        CCVX       
          Short 4-Month S&P 500 VIX Futures                        DDVX       
          Short 5-Month S&P 500 VIX Futures                        EEVX       
          Short 6-Month S&P 500 VIX Futures                        FFVX       

            *TR=Total Return and ER=Excess Return         

                  

      The contents of any website referred to in this communication are not part of, or incorporated by reference in, this communication. UBS AG has filed a registration statement (including a prospectus, as supplemented by a product supplement and pricing supplement, for the offering of the ETRACS ETNs) with the Securities and Exchange Commission (the “SEC”) for the offering to which this communication relates. Before you invest, you should read these documents and any other documents that UBS AG has filed with the SEC for more complete information about UBS AG and the offering 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 the applicable prospectus supplement by calling toll-free (+1.877.387.2275).   

© UBS 2012. The key symbol, UBS and ETRACS are among the registered and unregistered trademarks of UBS. “UBS Bloomberg Constant Maturity Commodity Index” and “CMCI” are service marks of UBS and/or Bloomberg. “Dow Jones,” “DJ-UBS Commodity Index” and “DJ-UBSCI” are service marks of Dow Jones & Company Inc. and UBS AG, as the case may be. “Standard & Poor’s®,” “S&P®,” “S&P 500®,” “Standard & Poor’s 500™,” “S&P 500 Gold Hedged,” “S&P 500 VIX Short-Term Futures Index,” “S&P 500 VIX 2-Month Futures Index,” “S&P 500 VIX 3-Month Futures Index,” “S&P 500 VIX 4-Month Futures Index,” “S&P 500 VIX Mid-Term Futures Index,” and “S&P       500 VIX 6-Month Futures Index” are trademarks of Standard & Poor’s Financial Services LLC (“S&P”) and have been licensed for use by UBS. “VIX” is a registered trademark of the Chicago Board Options Exchange, Incorporated (“CBOE”) and has been licensed to S&P. The ETRACS ETNs are not sponsored, endorsed, sold or promoted by S&P or CBOE and neither S&P nor CBOE makes any representation regarding the advisability of investing in the ETNs. “ISE Cloud Computing™ Total Return Index,” “ISE Solid State Drive™ Index,” “ISE Oil Futures Spread™”, “ISE Natural Gas Futures Spread™”, “ISE™®”, and “International Securities Exchange®” are trademarks of International Securities Exchange, LLC (“ISE” or  “Licensor”) and have been licensed for use for certain purposes by UBS Securities LLC and its affiliates. UBS AG’s ETRACS Monthly 2xLeveraged ISE Cloud Computing TR Index ETN, ETRACS ISE Solid State Drive Index ETN, ETRACS Monthly 2xLeveraged ISE Solid State Drive Index ETN, ETRACS Natural Gas Futures Contango ETN and ETRACS Oil Futures Contango ETN based on the ISE Cloud Computing™ Total Return Index, ISE Solid State Drive™ Index, ISE Natural Gas Futures Spread™ Index and the ISE Oil Futures Spread™ Index, respectively, are not sponsored, endorsed, sold or promoted by ISE, and ISE makes no representation regarding the advisability of trading in such product(s). Alerian MLP Infrastructure Index, Alerian Natural Gas MLP Index, Alerian MLP Infrastructure Total Return Index, Alerian Natural Gas MLP Total Return Index, AMZI, AMZIX and ANGI are trademarks of GKD Index Partners, LLC d/b/a Alerian and their use is granted under a license from GKD Index Partners. Wells Fargo Securities, Wells Fargo Securities, LLC, Wells Fargo, and Wells Fargo® Master Limited Partnership Index are trademarks of Wells Fargo & Company and have been licensed for use by UBS AG. ETRACS Wells Fargo MLP Index is not issued, guaranteed, sponsored, endorsed, sold or promoted  by Wells Fargo & Company, Wells Fargo Securities, LLC or their subsidiaries and affiliates (collectively, “Wells Fargo”). Wells Fargo       makes no representation or warranty, express or implied, to investors in the ETRACS ETNs or any member of the public regarding the advisability  of investing in securities generally or in this ETRACS Wells Fargo MLP Index particularly or the ability of any data supplied by Wells Fargo or  any Index to track financial instruments comprising the Index or any trading market. Wells Fargo & Company does not guarantee that the Index  referenced by the ETRACS ETNs has been accurately calculated and shall not have any liability for any error in the calculation. Wells Fargo’s only relationship to UBS AG is the licensing of certain intellectual property rights relating to the Index as well as trademarks and trade names of Wells Fargo and of the data supplied by Wells Fargo that is determined, composed, compiled and calculated by Wells Fargo or a third party index calculator, without regard to this ETRACS Wells Fargo MLP Index. Wells Fargo has no obligation to take into consideration the ETRACS Wells Fargo MLP Index or investors in the ETRACS ETNs when determining, composing, compiling or calculating the data. Wells Fargo has no obligation or liability in connection with the listing, registration, distribution, administration, marketing, trading or redemption or settlement by the issuer or otherwise of this ETRACS Wells Fargo MLP Index. Wells Fargo does not guarantee the accuracy and/or the  completeness of the index or of any data supplied by it or any data included therein. Wells Fargo makes no warranty, express or implied, as to results to be obtained by UBS AG and the ETRACS Wells Fargo MLP Index, or any other person or entity from the use of index or of the data supplied by Wells Fargo or any data included therein. Wells Fargo makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to the index and the data supplied by Wells Fargo or any data included therein. Without limiting any of the foregoing, in no       event shall Wells Fargo have any liability for any special, punitive, indirect, or consequential damages (including lost profits), even if       notified of the possibility of such damages. “MBF Index Holdings, LLC”, “The Fisher-Gartman Risk Index”, “The Fisher-Gartman Equity Subindex” and “The Fisher-Gartman Sovereign Bond Subindex” are trademarks of MBF  Index Holdings, LLC and have been licensed for use by UBS AG. The ETRACS Fisher-Gartman Risk On ETN and ETRACS Fisher-Gartman Risk Off ETN are not issued by, sponsored, endorsed, sold or promoted by MBF Index Holdings, LLC or its affiliates and MBF Index Holdings, LLC makes no representation regarding the advisability of investing in the product. MBF Index Holdings, LLC does not guarantee that the Index referenced by the product has been accurately calculated and shall not have any liability for any error in the calculation.   

      The “Dow Jones Global ex-U.S. Select Real Estate Securities IndexSM” is a product of Dow Jones Indexes, the marketing name and a licensed trademark of CME Group Index Services LLC (“CME”), and has been licensed for use. “Dow Jones®”, “Dow Jones Global ex-U.S. Select Real Estate Securities IndexSM” and “Dow Jones Indexes” are service marks of Dow Jones Trademark Holdings, LLC (“Dow Jones”) have been licensed to CME and have been sublicensed for use for certain purposes by UBS AG. The ETRACS Monthly Pay 2xLeveraged Dow Jones International Real Estate ETN is not sponsored, endorsed, sold or promoted by Dow Jones, CME or their respective affiliates. Dow Jones, CME and their respective affiliates make no representation or warranty, express or implied, to the owners of the ETRACS Monthly Pay 2xLeveraged Dow Jones International Real Estate ETN or any member of the public regarding the advisability of trading in the Product(s). Dow Jones’, CME’s and their respective affiliates’ only relationship to the Licensee is the licensing of certain trademarks and trade names of Dow Jones and of the Dow Jones Global ex-U.S. Select Real Estate Securities Index which is determined, composed and calculated by CME without regard to UBS AG or the ETRACS Monthly Pay 2xLeveraged Dow Jones International Real Estate ETN. Dow Jones and CME have no obligation to take the needs of UBS AG or the owners of the ETRACS Monthly Pay 2xLeveraged Dow Jones International Real Estate ETN into consideration in determining, composing or calculating “Dow Jones Global ex-U.S. Select Real Estate Securities IndexSM. Dow Jones, CME and their respective affiliates are not responsible for and have not participated in the determination of the timing of, prices at, or quantities of the ETRACS Monthly Pay 2xLeveraged Dow Jones International Real Estate ETN to be sold or in the determination or calculation of the equation by which the ETRACS Monthly Pay 2xLeveraged Dow Jones International Real Estate ETN are to be converted into cash. Dow Jones, CME and their respective affiliates have no obligation or liability in connection with the administration, marketing or trading of the ETRACS Monthly Pay 2xLeveraged Dow Jones International Real Estate ETN. Notwithstanding the foregoing, CME Group Inc. and its affiliates may independently issue and/or sponsor financial products unrelated to the ETRACS Monthly Pay 2xLeveraged Dow Jones International Real Estate ETN currently being issued by UBS AG, but which may be similar to and       competitive with the ETRACS Monthly Pay 2xLeveraged Dow Jones International Real Estate ETN. In addition, CME Group Inc. and its affiliates may trade financial products which are linked to the performance of the Dow Jones Global ex-U.S. Select Real Estate       Securities IndexSM. It is possible that this trading activity will affect the value of the Dow Jones Global ex-U.S. Select Real Estate       Securities IndexSM and ETRACS Monthly Pay 2xLeveraged Dow Jones International Real Estate ETN.   

      DOW JONES, CME AND THEIR RESPECTIVE AFFILIATES DO NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE DOW JONES GLOBAL EX-U.S. SELECT REAL ESTATE SECURITIES INDEX OR ANY DATA INCLUDED THEREIN AND DOW JONES, CME AND THEIR RESPECTIVE AFFILIATES SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. DOW JONES, CME AND THEIR RESPECTIVE AFFILIATES MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY UBS AG, OWNERS OF THE ETRACS MONTHLY PAY       2XLEVERAGED DOW JONES INTERNATIONAL REAL ESTATE ETN, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE DOW JONES GLOBAL EX-U.S. SELECT REAL ESTATE SECURITIES INDEX OR ANY DATA INCLUDED THEREIN. DOW JONES, CME AND THEIR RESPECTIVE AFFILIATES MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE DOW JONES GLOBAL EX-U.S. SELECT REAL ESTATE SECURITIES INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL DOW JONES, CME OR THEIR RESPECTIVE AFFILIATES HAVE ANY LIABILITY FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES OR LOSSES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN CME AND UBS AG, OTHER THAN THE LICENSORS OF CME.   

      Other marks may be trademarks of their respective owners. All rights reserved. UBS assumes sole responsibility for this marketing material, which has not been reviewed by Bloomberg.   

Notes to Editors

UBS draws on its 150-year heritage to serve private, institutional and corporate clients worldwide, as well as retail clients in Switzerland.       We combine our wealth management, investment banking and asset management businesses with our Swiss operations to deliver superior financial solutions.   

UBS is present in all major financial centers worldwide. It has offices in over 50 countries, with about 37% of its employees working in the Americas, 37% in Switzerland, 16% in the rest of Europe and 10% in Asia Pacific. UBS employs about 65,000 people around the world. Its shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).   

www.ubs.com/media

Contacts

      UBS Investment Bank New York: Michelle A. Lee, +1-212-333-3810   

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