New ETF Guards Against Swans
Latest offering from Amplify looks to avoid losses from black swan events.
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.
Contact Heather Bell at [email protected]
