TrueShares Launches New ConVex Protect ETF
- The TrueShares ConVex Protect ETF (PVEX) debuts with a laddered options strategy.
- The fund aims for upside participation after a 6% hurdle while reducing downside risk.
- Its portfolio combines income securities with put and call options on large-cap stocks.
TrueShares launched the TrueShares ConVex Protect ETF (PVEX) Monday, introducing an options-based strategy designed to capture equity upside while mitigating downside risk for investors seeking alternatives to traditional large-cap exposure.
PVEX aims to provide growth with lower volatility compared to the broader U.S. large-cap stock market through an options strategy that offers upside participation in market moves after a 6% hurdle has been cleared, according to a press release announcing the fund.
PVEX Aims for Growth with Less Volatility
The fund seeks growth with lower volatility by combining income-producing securities with an options strategy that sells put options representing 50% of portfolio exposure while buying call options for 100% exposure to U.S. large-cap stocks, according to the prospectus.
The fund's strategy revolves around quarterly options positions with one-year expiration dates. The first set includes four groups of expiration dates at approximately one-quarter, two-quarter, three-quarter and one-year intervals from launch, with roughly 25% of options expiring each quarter, according to the prospectus.
Mike Loukas, CEO of TrueMark Investments, described PVEX as "a powerful new portfolio construction tool" for investors seeking growth with reduced downside exposure compared to traditional large-cap stocks, according to the press release.
Options Strategy Creates Upside Focus
For stock market exposure, PVEX sells put options that are slightly in-the-money while buying call options that are out-of-the-money on securities representing U.S. large companies, defined as those with market values above $10 billion, according to the prospectus.
The strategy aims to capture upward market moves while limiting losses to approximately half of large-cap stock market declines, according to the filing. The fund may also use multiple call options when the adviser believes this approach offers better economic efficiency.
PVEX charges a 0.79% management fee and will be managed by Jeffrey Feldman, portfolio manager and quantitative risk manager at TrueMark Investments. Feldman previously spent more than 20 years with Wolverine Trading, handling ETF risk management and trading.
TrueMark has built a $1 billion ETF platform since 2020, focusing on uncapped buffer products and structured outcome strategies, according to the press release. The firm operates 12 uncapped buffer ETFs tied to specific months that seek upside exposure while partially mitigating losses in the 8% to 12% range.
