ETF Spotlight on PowerShares S&P 500 BuyWrite Portfolio ETF (NYSEArca: PBP), part of an ongoing series.
Assets: $116.5 million.
Objective: The PowerShares S&P 500 BuyWrite Portfolio fund is based off the CBOE S&P 500 BuyWrite Index. The Fund will hold a 80% or more of its assets in common stocks of the 500 companies on the S&P 500 Index and writes, or sells, call options. Specifically, the fund sells one-month at-the-money S&P 500 call options against the portfolio at regular intervals.
Buy-Write is a trading strategy that utilizes call options on a position to generate income from option premiums. The trader will only lose money if the market price of a stock rises above the exercised price upon maturity of the option, which tends to occur during quickly rising markets.
Holdings: Top holdings include: Apple (NasdaqGS: AAPL) 3.9%, Exxon Mobil (NYSE: XOM) 3.4%, Microsoft (NasdaqGS: MSFT) 1.9%, International Business Machines (NYSE: IBM) 1.9% and Chevron (NYSE: CVX) 1.8%.