24 ETFs for 2024, Pt. 3: Covered Calls & Mag 7
Covered-call strategies and the Magnificent Seven stocks still have massive appeal.
In this third installment of our 24 ETFs for 2024 series, etf.com wealth management editor Jeff Benjamin provides key points on six exchange-traded funds covering a range of topics, including 2023’s most popular investment themes like covered-call strategies, Magnificent Seven stocks and long-term Treasury bonds, as well as broad market investing and commodities.
JPMorgan Equity Premium Income ETF
A darling of the brokerage industry, the JPMorgan Equity Premium Income ETF (JEPI) continues to be among the most popular ETFs for its guardrail approach that keeps nervous investors in the markets in times of elevated stress.
Employing a covered-call strategy, JEPI offers higher yields and lower volatility, which can be attractive in uncertain market environments where option income can boost returns.
- Assets: $30.6 billion
- Expense ratio: 0.35%
- YTD performance: 9.24%
- As of date: Dec. 22, 2023
Roundhill Magnificent Seven ETF
Tapping into the popularity of seven tech stocks that have separated from the pack in terms of performance, the Roundhill Magnificent Seven ETF (MAGS) was born in November through the reworking of the Roundhill BIG Tech ETF (BIGT).
Think of MAGS as the engine behind the Invesco QQQ Trust (QQQ): the biggest names in technology that powered returns for the broader market in 2023. The question now is whether or not the big momentum will continue in 2024.
- Assets: $31.0 million
- Expense ratio: 0.29%
- Return since 04/11/23 inception: 35.81%
- As of date: Dec. 22, 2022
iShares 20+ Year Treasury Bond ETF
Some call it a contradiction, others call it a falling knife. With more than $23 billion worth of inflows in 2023, the iShares 20+ Year Treasury Bond ETF (TLT)is definitely an example of optimism.
The long-Treasury tracking ETF finally started to rally in October after falling most of the year. If the U.S. economy slows more than expected in 2024, TLT could continue to see price gains as the Federal Reserve cuts rates to fend off a recession.
- Assets: $50.07 billion
- Expense ratio: 0.15%
- YTD performance: 2.35%
- As of date: Dec. 22, 2023
Vanguard Total Stock Market ETF
The Vanguard Total Stock Market ETF (VTI) could stand out for its bargain basement fees or respectable global equity market exposure and performance. But what makes VTI unique is that it represents the first ETF used to implement Vanguard’s patent share class structure, a model that the mutual fund industry hopes to copy in 2024.
- Assets: $344.7 billion
- Expense ratio: 0.03%
- YTD performance: 25.74%
- As of date: Dec. 22, 2022
WisdomTree Enhanced Commodity Strategy Fund
As an actively managed fund offering exposure to four broad commodity sectors, the WisdomTree Enhanced Commodity Strategy Fund (GCC) is managed to mitigate the effects of futures contracts turnover by not following the traditional strategy of just buying the front-month futures contracts.
When it comes to buying futures contracts positions, this ETF is an all-weather tool, with a primary objective of diversified commodity exposure.
- Assets: $164.3 million
- Expense ratio: 0.55%
- YTD performance: -2.7%
- As of date: Dec. 22, 2023
Teucrium Sugar Fund
One of the top-performing commodity ETFs of 2023, the Teucrium Sugar Fund (CANE) is riding the global sugar supply disruption with a strategy of owning three of the four futures contracts on a rolling basis.
The positive-yielding backwardation will continue as long as the market believes the supply issues will be resolved, and until they are resolved.
- Assets: $17.6 million
- Expense ratio: 0.58%
- YTD performance: 29.28%
- As of date: Dec. 22, 2023
