First ETF Powered by a Daily Call Options Strategy
BETHESDA, Md.–(BUSINESS WIRE)–ProShares, a premier provider of ETFs, today launched the ProShares S&P 500 High Income ETF (CBOE: ISPY). With ISPY, investors can seek high income and target S&P 500 returns over the long term.
“We have seen substantial demand for income beyond conventional sources. ISPY, the first ETF powered by a daily call options strategy, offers investors the potential to earn high income and capture a long-term total return similar to that of the S&P 500,” said ProShares CEO Michael L. Sapir. “We believe that ISPY will be an attractive alternative to popular covered call ETFs, where investors may sacrifice long-term return potential in order to strive for high income.”
The launch of ISPY is a landmark innovation in covered call ETFs, a category that has attracted more than $59 billion in assets.1 Traditional covered call ETFs using monthly call options typically require investors and advisors to make a tradeoff between the potential for high income and long-term total returns. By employing a covered call strategy based on daily call options, ISPY provides a potential solution for investors seeking both high income and S&P 500 returns over the long term.
ProShares S&P 500 High Income ETF (ISPY) seeks investment results, before fees and expenses, that track the performance of the S&P 500 Daily Covered Call Index. The Index is designed to replicate the performance of an investment strategy that combines a long position in the S&P 500 Index with a short position in S&P 500 Index call options. In particular, the Index is designed to replicate a daily covered call strategy that sells call options with one day to expiration each day. ISPY invests in S&P 500 stocks and gains exposure to the daily call options included in the Index using swap agreements. The Fund does not trade options.
ProShares has been at the forefront of the ETF revolution since 2006. ProShares now offers one of the largest lineups of ETFs, with more than $64 billion in assets.2 The company is the leader in strategies such as dividend growth, interest rate hedged bond and geared (leveraged and inverse) ETF investing. ProShares continues to innovate with products that provide strategic and tactical opportunities for investors to manage risk and enhance returns.
The Fund seeks to replicate a daily covered call strategy by investing in equity securities and derivatives. The Fund does not sell (write) call options.
This is not intended to be investment advice.
Investing involves risk, including the possible loss of principal. This ProShares ETF is non-diversified and entails certain risks, including risks associated with the use of derivatives (swap agreements, futures contracts and similar instruments), imperfect benchmark correlation, and market price variance, all of which can increase volatility and decrease performance. Please see summary and full prospectuses for a more complete description of risks on ProShares.com. Shares of any ETF are generally bought and sold at market price (not NAV) and are not individually redeemed from the fund. Your brokerage commissions will reduce returns.
There is no guarantee any ProShares ETF will achieve its investment objective. The performance of the Fund may not correspond to the performance of the S&P 500 Index and the Fund may not be successful in generating income for investors.
The S&P 500 Daily Covered Call Index replicates the performance of a covered call investment strategy that combines a long position in the S&P 500 Index with a short position in S&P 500 Index call options. In particular, the index is designed to replicate a daily covered call strategy that sells call options with one day to expiration each day. The Fund intends to make distributions each month of an amount that reflects the dividends and call premium income earned by a daily S&P 500 Index covered call strategy (net of expenses). There can be no guarantee that the Fund will make such distributions and the amount of such distributions, if any, may vary significantly from month to month. A significant portion of such distributions may be characterized as a return of capital.
Carefully consider the investment objectives, risks, charges and expenses of ProShares before investing. This and other information can be found in their summary and full prospectuses at ProShares.com.
“The S&P 500 Daily Covered Call Index” is a product of S&P Dow Jones Indices LLC and its affiliates and has been licensed for use by ProShares. “S&P®” is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”) and “Dow Jones®” is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”) and have been licensed for use by S&P Dow Jones Indices LLC and its affiliates. ProShares have not been passed on by S&P Dow Jones Indices LLC and its affiliates as to their legality or suitability. ProShares based on the S&P 500 Daily Covered Call Index are not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P or their respective affiliates, and they make no representation regarding the advisability of investing in ProShares. THESE ENTITIES AND THEIR AFFILIATES MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO PROSHARES.
ProShares ETFs (ProShares Trust and ProShares Trust II) are distributed by SEI Investments Distribution Co., which is not affiliated with the funds’ advisor or sponsor.
|1 Source: Schmitt, Will. “Volatility Ebbs as $26bn Pours into Option-Writing ETFs.” Financial Times, 12 December 2023.
|2 Source: Morningstar. ProShares total net assets, as of November 30, 2023.
Tucker Hewes, Hewes Communications, Inc., (212) 207-9451, firstname.lastname@example.org
ProShares, (866) 776-5125, ProShares.com