DENVER, July 14, 2016 (GLOBE NEWSWIRE) -- Janus Capital Group, Inc., (NYSE:JNS) today announced the launch of three Volatility-Strategy exchange traded notes (“ETNs”) under its VelocitySharesTM brand – The VelocitySharesTM VIX Variable Long/Short ETN (NYSE:LSVX), The VelocitySharesTM VIX Tail Risk ETN (NYSE:BSWN) and The VelocitySharesTM VIX Short Volatility Hedged ETN (NYSE:XIVH).
The Volatility-Strategy ETNs utilize a systematic approach to investing in VIX futures that has a net long or net short volatility position that varies due to daily changes in the volatility market. “These products are the result of our experience in developing sophisticated exchange traded products (ETPs) for institutional investors that seek to use volatility as a component of their portfolios,” said Nick Cherney, Senior Vice President and Head of ETPs at Janus Capital Group.
“The products allow sophisticated investors to implement volatility strategies without the need to actively trade underlying positions on a daily basis,” said Steve Quinn, Head of ETP Distribution at Janus Capital Group.
The new Volatility-Strategy ETNs are being issued by UBS AG. The underlying indices of the ETNs have been published since 2011.
The Volatility-Strategy ETNs are the first ETNs to launch since Janus acquired VS Holdings, Inc., the parent company of VelocityShares, LLC, in November of 2014. The ETNs are the first UBS issued products launched by Janus Capital. Janus’ exchange traded products business is approximately $3.3 billion in assets across 18 investment products as of March 31, 2016.
About Janus Capital Group Inc.
Janus Capital Group Inc. (JCG) is a global investment firm dedicated to delivering better outcomes for clients through a broad range of investment solutions, including fixed income, equity, alternative and multi-asset class strategies. It does so through a number of distinct asset management platforms, including investment teams within Janus Capital Management LLC (Janus), INTECH Investment Management LLC (INTECH), Perkins Investment Management LLC (Perkins) and Kapstream Capital Pty Limited (Kapstream), in addition to a suite of exchange-traded products. Each team brings distinct asset class expertise, perspective, style-specific experience and a disciplined approach to risk. Investment strategies are offered through open-end funds domiciled in both the U.S. and offshore, as well as through separately managed accounts, collective investment trusts and exchange-traded products. Based in Denver, JCG has offices located in 12 countries throughout North America, Europe, Asia and Australia; the firm had complex-wide assets under management and ETP assets totaling $191.3 billion as of March 31, 2016.
An investment in the ETNs involves risks. Please read the more detailed explanation of risks relating to an investment in the ETNs in “Risk Factors” in the applicable prospectus supplement.
The ETNs do not pay any interest and do not guarantee any payment at maturity or upon call, acceleration or early redemption. The ETNs are fully exposed to a decline in the level of the index and you may lose all or a significant portion of your investment in the ETNs.
The ETNs are senior unsecured debt obligations of the issuer, UBS, and are not, either directly or indirectly, an obligation of or guaranteed by any other party. Any payment to be made on the ETNs, including any payment at maturity, or upon call, acceleration or early redemption, depends on the ability of UBS to satisfy its obligations as they come due. As a result, the actual and perceived creditworthiness of UBS will affect the market value, if any, of the ETNs prior to maturity, call, acceleration or early redemption. In addition, in the event UBS were to default on its obligations, you may not receive any amounts owed to you under the terms of the ETNs.
The ETNs require an understanding of futures contracts, volatility strategies and path dependence of investment results and are intended for sophisticated investors to use as part of an overall diversified portfolio, and should not be used as a buy and hold investment. The ETNs are risky and may not be suitable for investors who plan to hold them for longer periods of time.
There may not be an active trading market in the ETNs; sales in the secondary market may result in significant losses.
There are restrictions on the minimum number of ETNs you may redeem and on the procedures and timing for early redemption, and any early redemption is subject to the “Redemption Fee Amount,” as described in the applicable prospectus supplement.
The ETNs are designed to achieve their stated investment objectives over the short-term, and their performance over longer periods of time can differ from their stated objectives. In addition, investors in VIX futures contracts must roll their VIX futures positions from one month to the next, in order to maintain their exposure because futures positions, unlike positions in securities, cannot be held indefinitely and require frequent transactions in order to be maintained. The need to maintain a constant exposure to VIX futures creates the potential for positive or negative returns based on the shape of the VIX futures curve (i.e. whether the market for VIX futures is in contango or in backwardation. These changes are separate from outright movements in VIX futures. As a result, the return on a position in VIX futures may vary significantly from the percentage changes of the VIX Index itself. Typically, though not in all market conditions, this “roll cost” significantly decreases the return for investors who are long VIX futures. As a result, of this “roll cost” and other factors that may cause the value of the ETNs to decrease, including the effects of daily and quarterly rebalancing and the combined negative effect of the “Daily Investor Fee” and the “Futures Spread Fee” (each as defined in the applicable prospectus supplement), there is a significant possibility that the amount payable on the ETNs at maturity or upon call, early redemption or acceleration will be less than the amount of your initial investment in the ETNs, and that you will lose part or all of your initial investment. If you hold the ETNs for a long period of time. UBS does not expect any investor to hold the ETNs from inception to maturity. Accordingly, the ETNs should be purchased only by sophisticated investors who understand the consequences of investing in volatility indices and of seeking inverse or leveraged investment results, who understand the path dependence of investment returns and who will actively and frequently monitor their investment in the ETNs, even intraday.
The index sponsor may adjust the index in a way that affects the index closing level, and the index sponsor has no obligation to consider your interests as a holder of the ETNs.
Chicago Board of Options Exchange (CBOE) Volatility Index® (VIX®) shows the market’s expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options and is a widely used measure of market risk and is often referred to as the “investor fear" gauge. The VIX® volatility methodology is the property of CBOE, which is not affiliated with Janus.
VelocityShares is a trade name used by Janus Distributors LLC, in connection with the marketing services it provides for the VelocityShares-branded ETNs. Janus Distributors LLC, a registered broker-dealer, does not offer or sell the ETNs, and will only conduct business in states in which it is registered, unless it is otherwise excluded or exempted from being registered in each state.
UBS AG has filed a registration statement (including a prospectus and a supplement thereto) with the Securities and Exchange Commission (”SEC”) for the ETNs. Before you invest, you should read the prospectus supplement dated July 13, 2016 and the prospectus dated April 29, 2016 to understand fully the terms of the securities and other considerations that are important in making a decision about investing in the ETNs. The prospectus supplement for the ETNs may be obtained by clicking here https://www.sec.gov/Archives/edgar/data/1114446/000119312516647304/d204209d424b2.htm. You may also get these documents without cost by visiting EDGAR on the SEC website at www.sec.gov. An investment in the ETNs is subject to a number of risks, including the risk of loss of some or all of the investor’s principal, and is subject to the creditworthiness of UBS. Investors are not guaranteed any coupon or distribution amount under the ETNs. Investors should read the more detailed explanation of risks described under “Risk Factors” in the prospectus supplement for the ETNs.
Media Contact: Erin Passan, 303‐394‐7681 Erin.Passan@janus.com Investor Contact: John Groneman, 303‐336‐7466 John.Groneman@janus.com