ProShares launched the ProShares S&P 500 High Income ETF (ISPY) on the Cboe BZX Wednesday. With ISPY, investors can seek high income and target S&P 500 returns over the long term. ISPY seeks investment results, before fees and expenses, that track the performance of the S&P 500 Daily Covered Call Index.
The index’s strategy combines a long position in the S&P 500 with a short position in S&P 500 call options. It seeks 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 in the Index using swap agreements. The fund does not trade options.
See more: “ProShares Launches World’s First Short Ether-Linked ETF”
Aiming for High Income and Long-Term Returns
Traditional covered call ETFs using monthly call options often require a trade-off between potentially high income and long-term total returns. By employing a covered call strategy based on daily call options, ISPY attempts to give investors both.
“We have seen substantial demand for income beyond conventional sources,” said ProShares CEO Michael Sapir in a news release. He added that ISPY could “be an attractive alternative to popular covered call ETFs.”
ISPY charges 55 basis points.
Life After SETH
The launch of ISPY comes soon after ProShares launched the ProShares Short Ether Strategy ETF (SETH), the world’s first short ether-linked ETF. SETH provides investors with an opportunity to profit from declines in the price of ether.
SETH is designed to deliver the inverse (opposite) of the daily performance of the S&P CME Ether Futures Index. Like other ProShares crypto-linked ETFs, SETH seeks to obtain exposure through ether futures contracts.
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