UBS ETRACS Silver Shares Covered Call ETN

Frequently Asked Questions About SLVO

What does SLVO invest in?

SLVO is neither the choice for those looking for exposure to physical silver nor does it provide pure exposure to silver futures. SLVO is structured as an ETN so it promises to track silver (and options on silver), not to hold it. Furthermore, its index has a notional short call position against the notional long position in the physically backed silver ETF, SLV. The calls are set to about 106% of the SLV`s price level. The covered call strategy gives investors indirect exposure to silver, but with limited upside as the nominal long position will get called away in periods of sharply rising prices or in volatile market environments. The tradeoff is yield as premiums from writing calls on an otherwise yield-less asset. SLVO aims to distribute the yield monthly, atypical for an ETN. Prior to May 31, 2024 the Issuer and counterparty credit risk of this ETN was Credit Suisse AG.

What is the expense ratio of SLVO?

UBS ETRACS Silver Shares Covered Call ETN (SLVO) charges an expense ratio of 0.65%. This is the annual fee deducted from fund assets to cover management and operations.

What is SLVO's distribution yield?

SLVO's trailing-twelve-month yield is 81.13%, calculated from the sum of distributions over the past year divided by the current price. A rate this high reflects large option-premium distributions against a NAV that has declined over the same period. Part of each payout may be return of capital rather than earned income.

How does SLVO's covered-call strategy work?

SLVO sells call options against the stocks (or index) it holds, collecting premium income that gets passed through to shareholders as distributions. The strategy generates above-market income in flat or rising markets but caps upside. When the underlying rallies past the strike, the gains above the strike go to the option buyer, not the fund.

How big is SLVO?

UBS ETRACS Silver Shares Covered Call ETN (SLVO) manages $360.3M in total assets. AUM determines bid-ask liquidity and the fund's vulnerability to closure. Funds below ~$50M are at higher risk of liquidation.

Is SLVO actively managed or an index fund?

SLVO's management style is described in the fund's prospectus. See the description on the Summary tab for the published strategy.