Global X ETFs has launched the S&P 500 Covered Call UCITS ETF (XYLU).
Through writing call options on a basket of equities while also holding the underlying assets, the firm said the fund limits full upside participation in the S&P 500 but can still generate steady income during turbulent periods.
Global X said the fund may help diversify income portfolios, providing income through means other than traditional sources such as dividend stocks.
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The fund launched on the London Stock Exchange and Deutsche Börse Xetra with a total expense ratio of 0.45%.
"The US market is at a crossroads as the US Federal Reserve continues to raise rates and ten-year treasury yields increase, and investors are seeking returns in a potentially trendless market," said Rob Oliver, head of business development for Global X ETFs in Europe.
"XYLU, Global X's second addition to its income suite of products in Europe, may help investors to capitalise on elevated premiums while retaining some upside potential in the US market."
