NEW YORK, Nov. 22, 2022 /PRNewswire/ — Global X ETFs, the New York-based provider of exchange-traded funds (ETFs), today announced the launch of three new covered call ETFs covering the financials, health care, and information technology sectors of the S&P 500. The funds, listed below, are Global X’s latest additions to its Income family, which offers investors ETF strategies that look beyond traditional fixed income to help increase or diversify a portfolio’s yield potential.
|Fund Name||Ticker||Gross Exp.||Net Exp.*||Underlying Index||Fund Overview:|
|Global X Financials Covered Call & Growth ETF||FYLG||0.66 %||0.60 %||Cboe S&P Financial Select Sector Half BuyWrite Index||Buys the stocks in a select sector index and/or the respective sector ETF, and writes corresponding call options on a fund corresponding to approximately 50% of the value of the securities in the reference index.|
|Global X Health Care Covered Call & Growth ETF||HYLG||0.66 %||0.60 %||Cboe S&P Health Care Select Sector Half BuyWrite Index|
|Global X Information Technology Covered Call & Growth ETF||TYLG||0.66 %||0.60 %||Cboe S&P Technology Select Sector Half BuyWrite Index|
*Waivers are contractual and in effect until 3/1/24.
The U.S. Consumer Price Index (CPI) rose 7.7% from a year ago in October, as the pace of rising prices remained near 40-year highs. As the Federal Reserve and central banks around the world continue to hike rates to combat this persistent inflation, conditions can make it difficult for traditional equities and bonds to perform. Many investors are struggling to find asset classes that can help them to navigate volatility and manage for interest rate risk while maintaining their income objectives.
Covered call strategies can play an important role in the modern investor’s portfolio, offering a diversified potential source of income while mitigating downside risks. Historically, covered call strategies required investors to trade options themselves, a task requiring expertise and frequent hands-on trading. But the availability of ETFs that incorporate covered call strategies can help investors efficiently add these strategies to their portfolios. These three new options funds’ underlying indices measure the performance of a covered call strategy that holds a theoretical portfolio of the Select Sector index and sells a succession of one-month at-the-money covered call options on a respective sector ETF. Each Select Sector Half BuyWrite Index specifically reflects the performance of the component securities of the respective Select Sector Index combined with written (sold) at-the-money call options on a fund corresponding to approximately 50% of the value of the securities in the reference index.
“Covered Call & Growth Strategies can help investors to navigate choppy and sideways markets while still allowing them to capture upside,” said Rohan Reddy, Director of Research at Global X ETFs. “I’m thrilled that Global X is launching these three covered call strategies covering key sectors, delivering on our mission to provide investors with intelligent and unexplored solutions.”
The funds will join the Global X Income suite of over 20 ETFs and over $17 billion in assets under management.i
About Global X ETFs
Global X ETFs was founded in 2008. For more than a decade, our mission has been empowering investors with unexplored and intelligent solutions. Our product lineup features over 90 ETF strategies and over $37 billion in assets under management.ii While we are distinguished for our Thematic Growth, Income and International Access ETFs, we also offer Core, Commodity, and Alpha funds to suit a wide range of investment objectives. Explore our ETFs, research and insights, and more at www.globalxetfs.com.
Global X is a member of Mirae Asset Financial Group, a global leader in financial services, with more than $545 billion in assets under management worldwide.iii Mirae Asset has an extensive global ETF platform ranging across the US, Australia, Brazil, Canada, Colombia, Europe, Hong Kong, India, Japan, Korea, and Vietnam with over $80bn in assets under management.iv
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Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit or guarantee against a loss. Concentration in a particular industry or sector will subject the funds to loss due to adverse occurrences that may affect that industry or sector. Investors should be willing to accept a high degree of volatility in the price of the funds’ shares and the possibility of significant losses. These funds are non-diversified.
The funds engage in options trading. An option is a contract sold by one party to another that gives the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed upon price within a certain period or on a specific date. A covered call option involves holding a long position in a particular asset and writing a call option on that same asset with the goal of realizing additional income from the option premium. By selling covered call options, the funds limit their opportunity to profit from an increase in the price of the underlying index above the exercise price, but continue to bear the risk of a decline in the index. A liquid market may not exist for options held by the funds. While the funds receive premiums for writing the call options, the price they realize from the exercise of an option could be substantially below the indices current market price.
Carefully consider the funds’ investment objectives, risks, and charges and expenses before investing. This and other information can be found in the funds’ full or summary prospectuses, which may be obtained at globalxetfs.com. Please read the prospectus carefully before investing.
Global X Management Company LLC serves as an advisor to Global X Funds. The Funds are distributed by SEI Investments Distribution Co. (SIDCO 1 Freedom Valley Dr., Oaks, PA 19456), which is not affiliated with Global X Management Company LLC.
i Source: Global X, as of 11/21/22
ii Source: Global X, as of 11/21/22
iii Mirae Asset, as of September 2022
iv Mirae Asset, as of September 2022
SOURCE Global X Management Company LLC