NEW YORK, Sept. 21, 2020 (GLOBE NEWSWIRE) -- Global X ETFs, the New York-based provider of exchange-traded funds (ETFs), today announced the launch of the Global X Nasdaq 100 Covered Call & Growth ETF (QYLG) and the Global X S&P 500 Covered Call & Growth ETF (XYLG).
Investors face a historically low-yielding market amidst the backdrop of rock-bottom interest rates and tight credit spreads. At the same time, equity markets have offered investors robust growth since their March 2020 lows and continue to test new all-time highs. QYLG and XYLG are designed to balance upside participation in major US equity indexes with generating additional income potential through covered call writing.
The funds invest in the stocks held by their respective underlying indexes and write at-the-money monthly index options covering 50% of their portfolio. This approach seeks to capture approximately half of any upside potential of the equity indexes they track, while also potentially achieving additional income through the premiums received from writing options.
“In this extraordinarily low rate environment, investors continue to eagerly explore alternatives to fixed-income,” said Rohan Reddy, research analyst at Global X ETFs. “Increasingly, they are utilizing covered call strategies because of their high yield potential and minimal duration risk. Yet as markets touch on all-time highs, it’s become clear that investors want a balanced approach that can offer both higher yield and participation in the market’s growth. We’re thrilled to be bringing XYLG and QYLG to our clients as a solution for modern market dynamics.”
The funds join Global X’s existing suite of three covered call ETFs, which differ by writing options on the entirety of their underlying indices. The existing funds include the Global X Nasdaq 100 Covered Call ETF (QYLD), the Global X S&P 500 Covered Call ETF (XYLD), and the Global X Russell 2000 Covered Call ETF (RYLD). The suite totals over $1.3bn in assets under management as of September 17, 2020.
About Global X ETFs
Global X was founded in 2008 with the mission of listening to and empowering clients to invest wisely in unexplored and intelligent solutions. Our product lineup features more than 70 ETF strategies. While we are distinguished for our Thematic Growth, Income and International Access ETFs, we also offer Core, Commodity, and Alpha funds to suit a wide range of investment objectives. Global X is a member of Mirae Asset Global Investments Group, a Seoul-based global enterprise which offers asset management expertise worldwide. Explore our ETFs, research and insights, and more at www.globalxetfs.com.
Media Contact:
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Risk Information:
Investing involves risk, including the possible loss of principal. Concentration in a particular industry or sector will subject the funds to loss due to adverse occurrences that may affect that industry or sector. Investors in the funds should be willing to accept a high degree of volatility in the price of the fund’s shares and the possibility of significant losses.
The funds engage in options trading. An option is a contract sold by one party to another that gives the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed upon price within a certain period or on a specific date. A covered call option involves holding a long position in a particular asset, in this case U.S. common equities, and writing a call option on that same asset with the goal of realizing additional income from the option premium. QYLG writes covered call index options on the Nasdaq 100 Index. XYLG writes covered call index options on the S&P 500 Index. By selling covered call options, the fund limits its opportunity to profit from an increase in the price of the underlying index above the exercise price, but continues to bear the risk of a decline in the index. A liquid market may not exist for options held by the fund. While the fund receives premiums for writing the call options, the price it realizes from the exercise of an option could be substantially below the indices current market price. QYLG is non-diversified.
Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Indices are unmanaged and do not include the effect of fees, expenses or sales charges. One cannot invest directly in an index.
Carefully consider the Fund’s investment objectives, risks, and charges and expenses before investing. This and other information can be found in the Fund’s summary or full prospectuses, which may be obtained at globalxetfs.com. Please read the prospectus carefully before investing.
Global X Management Company LLC serves as an advisor to Global X Funds. The Funds are distributed by SEI Investments Distribution Co. (SIDCO), which is not affiliated with Global X Management Company LLC or Mirae Asset Global Investments. Global X Funds are not sponsored, endorsed, issued, sold or promoted by S&P, Nasdaq or CBOE, nor do these entities make any representations regarding the advisability of investing in the Global X Funds. Neither SIDCO, Global X nor Mirae Asset Global Investments are affiliated with these entities.