Horizons ETFs Management has launched the Horizons S&P Financial Select Sector Covered Call ETF (HFIN). The ETF uses a covered-call strategy to generate additional income from stocks in the S&P Financial Select Sector Index. It has an expense ratio of 0.70 percent, or $70 for every $10,000 invested.
A covered call is an options strategy whereby an investor holds a long position in an asset and sells or “writes” call options on that same asset. The goal is to generate more income, through the sale of call options, than the asset would otherwise provide on its own from dividends or other distributions.
Covered-call option strategies are designed to enhance portfolio returns and reduce volatility. A covered-call strategy is generally used in a neutral-to-bullish market environment, where a slow and steady rise in market prices is anticipated.
Other Filings And Launches
- ProShares, the fund sponsor specializing in what it calls alternative ETF strategies, filed updated paperwork detailing a price (0.50 percent, or $50 for every $10,000 invested) and the ticker “EMSH” on its proposed ProShares Short Term USD Emerging Markets Bond ET. The updated filing suggests the fund—which is designed to help investors get a bit of extra yield without risking too much in the way of potential capital losses—is nearing launch.
- ALPS has filed paperwork to launch a Workplace Equality Fund (EQLT) that will track the Workplace Equality Index. The ETF consists of approximately 140 stocks of U.S. and foreign companies that support equality for lesbian, gay, bisexual and transgender employees. The fund sports an expense ratio of 0.75 percent, or $75 for every $10,000 invested.
- New York-based Acacia Asset Management has filed with regulators seeking exemptive relief to launch actively managed ETFs. The firm’s first proposed offering is the Acacia Ultra Short ETF. The proposed fund will invest primarily in fixed-income securities with ultra-short maturities. Those will include dollar-denominated investment-grade debt securities, government securities and/or repurchase agreements.
- WisdomTree Investments has filed paperwork with regulators seeking exemptive relief for long/short and 130/30 funds, which short up to 30 percent of the portfolio, to be launched in master-feeder structures and employing self-indexing methodologies. The firm’s initial fund under the 130/30 request will track the WisdomTree Government/Corporate Bond Negative Duration Index, a long/short index currently in development.
For a full list of ETF launches and filings for this year, see ETF Watch.