High-Yield ETNs Stand Out as UBS Declares New Coupon Payments
UBS is in the spotlight today as the firm announces coupon payments on eight ETRACS Exchange Traded Notes (ETNs), offering yields that could pique the interest of income-focused investors. Several of these ETNs are set to pay current or expected yields well into the double digits—some above 27%. While such numbers grab attention, UBS is clear that these payouts are variable and come with notable risks, a point that shouldn't be overlooked.
UBS ETRACS Coupon Details Show Wide Range of Annualized Yields
The announcement includes five NYSE Arca-traded ETNs with coupon amounts and three NASDAQ-traded ETNs with expected payments. The highest annualized yield on this list is for the SLVO, a Silver Shares Covered Call ETN, boasting an eye-popping expected yield of 27.82%. The lowest in this group is USOI (Crude Oil Shares Covered Call), at a still impressive 16.17%.
For investors comparing income options, here’s a side-by-side look at the declared and expected coupon amounts and current yields as of the latest notice:
| Ticker | Underlying Index or Strategy | Coupon Amount ($) | Payment Date | Annualized Yield (%) |
|---|---|---|---|---|
| HDLB | High Dividend Low Volatility | 0.1745 | 12/22/2025 | 12.52 |
| SMHB | Small Cap High Dividend | 0.0422 | 12/22/2025 | 19.76 |
| PFFL | Preferred Stock | 0.1368 | 12/22/2025 | 13.39 |
| CEFD | Closed-End Fund | 0.2210 | 12/22/2025 | 14.36 |
| MVRL | Mortgage REITs | 0.1670 | 12/22/2025 | 18.58 |
| GLDI | Gold Shares Covered Call | 3.2409 | 12/29/2025 | 18.63 |
| SLVO | Silver Shares Covered Call | 2.6875 | 12/29/2025 | 27.82 |
| USOI | Crude Oil Shares Covered Call | 0.6282 | 12/29/2025 | 16.17 |
Why the High Yields? Structure and Leverage Drive ETN Payments
Many ETRACS ETNs are structured with leverage—ranging from 1.5x to 2x exposure—amplifying both potential income and risk. Some, like HDLB and SMHB, link their variable monthly coupons to 2x the underlying index’s cash distributions. For others, including MVRL and CEFD, payouts are tied to 1.5x distributions from their respective indices. The covered call ETNs (GLDI, SLVO, USOI) rely on the notional sale of options, which can boost yield when volatility is high.
It’s important to note, as UBS emphasizes, these payouts are variable and subject to market swings, underlying index performance, and, crucially, UBS’s own creditworthiness as issuer. Yields could rise or fall substantially period-to-period.
Investor Takeaway: High-Yield Appeal Comes With Real Risks
The promise of double-digit yields on ETNs such as SLVO and SMHB is clearly attractive in the current environment, especially as traditional income vehicles offer more muted returns. But there are real caveats: coupon amounts can swing widely or even be zero, yields are not guaranteed, and investors bear UBS’s credit risk as the ETNs are unsecured debt obligations.
For investors weighing these instruments, it’s crucial to read the underlying prospectus and understand the risks that come with these tempting headline numbers. Variable coupons can make planning for steady income tricky, and the credit risk is fundamentally different from standard equities or even typical ETFs.
Bottom Line: Yield Seekers Should Watch the Fine Print
UBS’s new ETRACS coupon declaration offers a snapshot of what’s possible for yield-focused portfolios—if one is willing to shoulder more complexity and risk. The yields may look compelling now, but like all variable-income products, what’s advertised today can change with the next market cycle.
Contact Information:
If you have feedback or concerns about the content, please feel free to reach out to us via email at support@marketchameleon.com.
About the Publisher - Marketchameleon.com:
Marketchameleon is a comprehensive financial research and analysis website specializing in stock and options markets. We leverage extensive data, models, and analytics to provide valuable insights into these markets. Our primary goal is to assist traders in identifying potential market developments and assessing potential risks and rewards.
NOTE: Stock and option trading involves risk that may not be suitable for all investors. Examples contained within this report are simulated and may have limitations. Average returns and occurrences are calculated from snapshots of market mid-point prices and were not actually executed, so they do not reflect actual trades, fees, or execution costs. This report is for informational purposes only, and is not intended to be a recommendation to buy or sell any security. Neither Market Chameleon nor any other party makes warranties regarding results from its usage. Past performance does not guarantee future results. Please consult a financial advisor before executing any trades. You can read more about option risks and characteristics at theocc.com.
The information is provided for informational purposes only and should not be construed as investment advice. All stock price information is provided and transmitted as received from independent third-party data sources. The Information should only be used as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments and trading strategies. The Company does not guarantee the accuracy, completeness or timeliness of the Information.
Disclosure: This article was generated with the assistance of AI