On Tuesday, Defiance ETFs released a new addition to their options income ETF library with the Defiance S&P 500 Target Income ETF (SPYT ). The new fund has an expense ratio of 0.94%. SPYT is actively managed and uses an options-based etf strategy to generate cash flows in the immediate or short-term.
The options-based etf invests in ETFs tracking the S&P 500. It pairs this with selling daily credit call spreads on the same index. The annual target income for the fund is 20%.
Consistent monthly distributions remain a priority for SPYT, generated primarily from the call spread sales. The fund’s sub-adviser, ZEGA Financial, LLC, may modify its approach in order to achieve its targeted income goal. However, it will not modify its strategy to accommodate market conditions or take a defensive stance, according to its prospectus.
“We are so excited to announce the launch of our new innovative enhanced income ETF. Investors have expressed interest in ETFs which can provide monthly income, along with equity market performance. SPYT could allow investors to potentially receive enhanced income, coupled with upside potential to the value of the S&P 500,” Defiance ETFs chief executive officer Sylvia Jablonski noted.
With this latest launch, Defiance ETFs now has 11 ETFs currently listed in the United States, representing more than $1.4 billion in managed assets. Its largest fund is the Defiance Next Gen Connectivity ETF (FIVG ), with $603.6 million in AUM.
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