UBS, the Swiss bank known for its private-client investment services, said it will rename both of its Internet ETNs—“EIPO” and “EIPL”—as well as their respective index, to make clearer to investors that the portfolios are focused only on the newest Internet companies.
At a time when other Internet-linked strategies are popping up as investors’ appetite for IPOs in the space continues to grow, UBS is hoping that by adding a “Next Generation” tag to its Internet-linked strategies it will be able to better differentiate its products from other more broad Internet-related funds that had their initial public offerings more than three years ago.
Indeed, the single-exposure ETRACS Internet IPO ETN (NYSEArca:EIPO - News) and the double-exposure Monthly 2x Leveraged ETRACS Internet IPO ETN (NYSEArca:EIPL - News) tap only into companies that have been public for fewer than three years. They therefore don’t include names like Google, Amazon or eBay, which all had their IPOs outside of the three-year window UBS is focused on.
While neither of the UBS ETNs has gathered significant assets since their July launches—EIPO has $7.4 million and EIPL $4.9 million—UBS’ move underscores the growing popularity of Internet-focused strategies with investors. It also signals UBS’ aim to differentiate its products in a crowding field.
Companies like First Trust, Invesco PowerShares and Global X are among the fund providers that have served up Internet-related ETFs.
Looking Only For The Latest IPOs
The current names, tickers as well as new monikers for the UBS ETNs and their underlying index are as follows:
- ETRACS Internet IPO ETN (NYSEArca:EIPO - News) will be called ETRACS Next Generation Internet ETN
- Monthly 2x Leveraged ETRACS Internet IPO ETN (NYSEArca:EIPL - News) will be called ETRACS Monthly 2x Leveraged Next Generation Internet ETN
- UBS Internet IPO Index (NETIPO) will be called UBS Next Generation Internet Index
The ETNs’ market-cap-weighted benchmarks review their components monthly so that new IPOs can be included quickly.
Currently, Yandex, Youku, LinkedIn Corp., Homeaway and Pandora Media top the index’s list of holdings, UBS said in a press release.
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