SMHD And MORL Holders Learn Expensive Lesson In Premium Reversion

About: UBS ETRACS Monthly Pay 2x Leveraged Mortgage REIT ETN (MORL), SMHD, Includes: MRRL, SMHB
by: Stanford Chemist
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Stanford Chemist
ETF investing, closed-end funds, dividend investing, portfolio strategy

ETN premiums can evaporate in an instant, saddling an investor with losses.

Swapping from SMHD to SMHB would have saved 10 months' worth of distributions in 3 months.

Swapping from MORL to MRRL  would have saved 4 months' worth of distributions in 1.5 months.

Don't let ETN premium reversion catch you out!

Note: The first part of this article was released to members on September 17, 2019.

In June of this year ("ETRACS 2x Leveraged ETN Snapshot, June 2019: MORL And SMHD At Or Near Record