ETF Filing: New PutWrite Strategy ETF
The fund will apply a put-write strategy to the Russell 2000 Index.
WisdomTree recently filed for a put-write strategy ETF that uses the Russell 2000 as its base index. The WisdomTree CBOE Russell 2000 PutWrite Strategy Fund will sell put options on the Russell 2000 Index and invest the resulting proceeds in one-month Treasury bills, according to the prospectus.
Essentially, the index represents the performance of a cash-secured put option sales strategy, the document said. When the fund writes a put on the Russell 2000 (RUT), the seller gets a premium from the buyer of the put. In a sideways market, the fund will earn a positive return; however, it will underperform the Russell 2000 if that index goes up, and fall should the Russell 2000 decline below the strike price.
The fund will complement the $189 million WisdomTree CBOE S&P 500 PutWrite Strategy ETF (PUTW), which uses a similar approach based on the S&P 500 Index.
The filing did not include a ticker, expense ratio or listing exchange.
Contact Heather Bell at [email protected].
