Two More War Crime ETFs on the Way

Presented without comment…

From Brendan Conway at Barron’s:

NYSE Arca put out a notice yesterday about two unusual-sounding fund launches slated for Wednesday. I say “unusual sounding” because I can’t actually find a prospectus for either at the website of UBS AG’s ETRACS, the company Arca says is running them.

The names suggest that they’re leveraged dividend exchange traded notes:

  • ETRACS Monthly Pay 2xLeveraged Dow Jones Select Dividend Index ETN (DVYL)
  • ETRACS Monthly Pay 2xLeveraged S&P Dividend ETN (SDYL)

We’ll have more on this as we get the information. But imagine that: If your dividend payout is too small, well, leverage it up!

Okay, I can’t resist, one comment: Leverage and the long-term holding periods that are germane to dividend investing don’t mix.  It’s like octopusses and sandwiches.  Leveraged funds erode over time because of negative compounding (they reset each day) and dividend strategies only work IF YOU HOLD THE FUCKING THING LONG ENOUGH TO RECEIVE THE DIVIDENDS.

Everyone involved with this should be forced to apologize, in advance, for the stupidity inherent in these.

AND they’re ETN’s – vastly inferior to ETFs in that they are essentially a note backed by the full faith and credit of the issuer – in this case UBS).  These products are unsuitable for anyone, in my view.  As a long-term investment they are absurd and as a shorter-term trading vehicle they are unnecessary.

I’ve said some harsh things about UBS before.  I felt bad afterwards.  Not anymore.

Just go away.

Source:

Now This: Leveraged Dividends? (Barron’s)

 

 

What's been said:

Discussions found on the web
  1. bitcoin loophole commented on Sep 30

    … [Trackback]

    […] Here you will find 66735 additional Information to that Topic: thereformedbroker.com/2012/05/23/two-more-war-crime-etfs-on-the-way/ […]

  2. Exotic Pets for Sale commented on Oct 13

    … [Trackback]

    […] Find More on on that Topic: thereformedbroker.com/2012/05/23/two-more-war-crime-etfs-on-the-way/ […]

  3. Buy gun optics online commented on Oct 14

    … [Trackback]

    […] Find More here on that Topic: thereformedbroker.com/2012/05/23/two-more-war-crime-etfs-on-the-way/ […]

  4. 온라인홀덤 commented on Oct 16

    … [Trackback]

    […] Find More Information here to that Topic: thereformedbroker.com/2012/05/23/two-more-war-crime-etfs-on-the-way/ […]

  5. รับทำเว็บไซต์ commented on Nov 30

    … [Trackback]

    […] Here you will find 29477 more Info to that Topic: thereformedbroker.com/2012/05/23/two-more-war-crime-etfs-on-the-way/ […]

  6. 마추자 commented on Dec 18

    … [Trackback]

    […] Find More on on that Topic: thereformedbroker.com/2012/05/23/two-more-war-crime-etfs-on-the-way/ […]

  7. functional testing commented on Dec 19

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2012/05/23/two-more-war-crime-etfs-on-the-way/ […]

  8. best franchises to own in texas commented on Jan 24

    … [Trackback]

    […] Here you will find 63842 more Info on that Topic: thereformedbroker.com/2012/05/23/two-more-war-crime-etfs-on-the-way/ […]

  9. paito warna sgp commented on Jan 30

    … [Trackback]

    […] Read More here on that Topic: thereformedbroker.com/2012/05/23/two-more-war-crime-etfs-on-the-way/ […]