New ETF Guards Against Swans

Latest offering from Amplify looks to avoid losses from black swan events.
Reviewed by: Staff
Edited by: Staff

Today Amplify Investments debuted an ETF that looks to capture the performance of the S&P 500 Index while avoiding steep downturns. The Amplify BlackSwan Growth & Treasury Core ETF (SWAN) invests primarily in long-dated call options, otherwise known as LEAPS, on the SPDR S&P 500 ETF Trust (SPY) and in Treasury securities.

SWAN comes with an expense ratio of 0.49% and lists on the NYSE Arca.

The fund’s underlying index allocates roughly 10% of the portfolio to SPY LEAP options and the remainder to Treasury securities. In this way, investors are exposed to roughly 70% of the upside seen by the S&P 500 Index during a full market cycle, while the Treasury exposure protects against significant losses, according to the prospectus.

The index undergoes rebalancing and reconstitution on a semiannual basis, the document says.

“Investors are increasingly looking for rules-based equity strategies that can adapt to various equity market conditions,” said Amplify CEO Christian Magoon.

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