Top holdings include International Business Machines 5.1%, Schlumberger 5.1%, Microsoft 5.1%, Cisco Systems 5.1% and Kraft Heinz Co. 5.0%.
Additionally, the active ETF tries to lower risk and enhance total return by tactically selling short-term call options on some, or all, of the individual stocks in the portfolio.
The covered-call options strategy allows an investor to hold a long position in an asset while simultaneously writing, or selling, call options on the same asset. Traders would typically employ a covered-call strategy when they have a neutral view of the markets over the short-term and just bank on income generation from the option premium.
While these buy-write strategies may not produce any phenomenal returns compared to the broader equities markets, their underlying option strategy helps them generate outsized yields.
The active ETF will seek to produce annual income of 4% to 7%.
For more information on new fund products, visit our new ETFs category.