ProShares Launches Russell 2000 High Income ETF
ProShares has launched the ProShares Russell 2000 High Income ETF (CBOE: ITWO), the first Russell 2000 ETF powered by a daily call options strategy. ITWO aims to provide investors with high income potential and long-term returns approximating the small-cap Russell 2000 Index. This launch expands ProShares' suite of covered call ETFs, following the success of ISPY (S&P 500) and IQQQ (Nasdaq-100).
The fund tracks the Cboe Russell 2000 Daily Covered Call Index, combining a long position in Russell 2000 stocks with short positions in daily call options. ITWO uses swap agreements to gain exposure to these daily call options. This strategy aims to offer a differentiated return profile compared to large-cap stock indexes, catering to investors seeking high yield potential without sacrificing total return.
ProShares ha lanciato il ProShares Russell 2000 High Income ETF (CBOE: ITWO), il primo ETF Russell 2000 basato su una strategia di opzioni call giornaliere. ITWO mira a fornire agli investitori un alto potenziale di reddito e rendimenti a lungo termine che si avvicinano all'indice Russell 2000 delle piccole imprese. Questo lancio amplia la gamma di ETF con opzioni coperte di ProShares, dopo il successo di ISPY (S&P 500) e IQQQ (Nasdaq-100).
Il fondo segue il Cboe Russell 2000 Daily Covered Call Index, combinando una posizione lunga in azioni del Russell 2000 con posizioni corte in opzioni call giornaliere. ITWO utilizza contratti di swap per avere esposizione a queste opzioni call giornaliere. Questa strategia mira a offrire un profilo di rendimento differente rispetto agli indici azionari delle grandi capitalizzazioni, soddisfacendo gli investitori alla ricerca di un alto potenziale di rendimento senza sacrificare il rendimento totale.
ProShares ha lanzado el ProShares Russell 2000 High Income ETF (CBOE: ITWO), el primer ETF Russell 2000 impulsado por una estrategia de opciones de compra diarias. ITWO busca proporcionar a los inversionistas alto potencial de ingresos y rendimientos a largo plazo que se aproximen al índice Russell 2000 de pequeñas capitalizaciones. Este lanzamiento amplía la gama de ETFs de opciones cubiertas de ProShares, siguiendo el éxito de ISPY (S&P 500) e IQQQ (Nasdaq-100).
El fondo sigue el Cboe Russell 2000 Daily Covered Call Index, combinando una posición larga en acciones del Russell 2000 con posiciones cortas en opciones de compra diarias. ITWO utiliza acuerdos de swap para obtener exposición a estas opciones de compra diarias. Esta estrategia busca ofrecer un perfil de rendimiento diferenciado en comparación con los índices de acciones de grandes capitalizaciones, atendiendo a los inversionistas que buscan un alto potencial de rendimiento sin sacrificar el rendimiento total.
ProShares는 ProShares Russell 2000 High Income ETF (CBOE: ITWO)를 출시했습니다. 이는 일일 콜 옵션 전략을 기반으로 한 첫 번째 Russell 2000 ETF입니다. ITWO는 투자자들에게 높은 소득 잠재력과 소형주 Russell 2000 지수에 가까운 장기 수익을 제공하는 것을 목표로 합니다. 이 출시는 ISPY(S&P 500) 및 IQQQ(Nasdaq-100)의 성공에 이어 ProShares의 커버드 콜 ETF 제품군을 확장하는 것입니다.
이 펀드는 Cboe Russell 2000 Daily Covered Call Index를 추적하며, Russell 2000 주식에 대한 롱 포지션과 일일 콜 옵션에 대한 숏 포지션을 결합합니다. ITWO는 이러한 일일 콜 옵션에 대한 노출을 얻기 위해 스왑 계약을 사용합니다. 이 전략은 대형주 주식 지수와 비교하여 차별화된 수익 프로필을 제공하며, 총 수익을 희생하지 않고 높은 수익 잠재력을 찾는 투자자들을 겨냥하고 있습니다.
ProShares a lancé le ProShares Russell 2000 High Income ETF (CBOE: ITWO), le premier ETF Russell 2000 basé sur une stratégie d'options d'achat journalières. ITWO vise à offrir aux investisseurs un potentiel de revenu élevé et des rendements à long terme proches de l'indice Russell 2000 des petites capitalisations. Ce lancement élargit la gamme des ETF d’options couvertes de ProShares, après le succès d'ISPY (S&P 500) et d'IQQQ (Nasdaq-100).
Le fonds suit le Cboe Russell 2000 Daily Covered Call Index, combinant une position longue dans des actions du Russell 2000 avec des positions courtes dans des options d'achat journalières. ITWO utilise des contrats swap pour obtenir une exposition à ces options d'achat journalières. Cette stratégie vise à offrir un profil de rendement différencié par rapport aux indices boursiers à grande capitalisation, s'adressant aux investisseurs cherchant un potentiel de rendement élevé sans sacrifier le rendement total.
ProShares hat den ProShares Russell 2000 High Income ETF (CBOE: ITWO) gestartet, den ersten Russell 2000 ETF, der durch eine tägliche Call-Option-Strategie betrieben wird. ITWO zielt darauf ab, den Anlegern ein hohes Einkommenspotenzial und langfristige Renditen, die dem Small-Cap Russell 2000 Index entsprechen, zu bieten. Dieser Start erweitert das Sortiment der Covered Call ETFs von ProShares, nach dem Erfolg von ISPY (S&P 500) und IQQQ (Nasdaq-100).
Der Fonds verfolgt den Cboe Russell 2000 Daily Covered Call Index, der eine Long-Position in Russell 2000 Aktien mit Short-Positionen in täglichen Call-Optionen kombiniert. ITWO nutzt Swap-Vereinbarungen, um Zugang zu diesen täglichen Call-Optionen zu erhalten. Diese Strategie zielt darauf ab, ein differenziertes Ertragsprofil im Vergleich zu großen Aktienindizes anzubieten und richtet sich an Anleger, die ein hohes Ertragspotenzial suchen, ohne die Gesamtrendite zu opfern.
- First Russell 2000 ETF with a daily call options strategy
- Aims to provide high income and long-term returns similar to Russell 2000 Index
- Expands ProShares' suite of innovative covered call ETFs
- Targets a differentiated return profile compared to large-cap indexes
- None.
Insights
The launch of ProShares Russell 2000 High Income ETF (ITWO) marks a significant development in the ETF landscape, particularly for investors seeking exposure to small-cap stocks with a high-income twist. This product innovates by applying a daily covered call strategy to the Russell 2000 index, potentially offering both high yield and long-term returns comparable to the underlying index.
The timing is notable, given the $80 billion in assets already attracted by covered call ETFs. This suggests a strong market appetite for such products. ProShares' expansion into small-caps with this strategy could tap into a new segment of demand, potentially driving significant inflows.
However, investors should be cautious. While the strategy aims to provide high income without sacrificing total return, the actual performance will depend on market conditions. In volatile or sideways markets, this strategy might outperform, but in strongly bullish markets, it could lag the underlying index due to capped upside from the call options.
The introduction of ITWO reflects a growing trend in the ETF market towards more sophisticated income-generating strategies. This product differentiates itself by focusing on the small-cap Russell 2000 Index, offering a unique proposition in a market dominated by large-cap covered call ETFs.
The success of ProShares' previous launches in this category (ISPY and IQQQ) suggests there's investor appetite for such products. However, the small-cap focus of ITWO adds a new dimension. Small-cap stocks are generally more volatile, which could potentially enhance the income generation from the covered call strategy, but also increase risk.
It's worth noting that this product launches amid increasing interest in alternative income sources due to the current high interest rate environment. If rates start to decline, products like ITWO could see increased demand from yield-seeking investors.
First Russell 2000 ETF Powered by a Daily Call Options Strategy
“Covered call strategies have gained popularity for their high yield potential, but conventional covered call ETFs often sacrifice total return to generate that income,” said ProShares CEO Michael L. Sapir. “ITWO, the first Russell 2000 ETF powered by a daily call options strategy, expands our suite of first-to-market innovations in the fast-growing covered call category. The fund offers investors both the potential for high income and long-term total returns approximating that of the small-cap Russell 2000 Index.”
As a category, covered call ETFs have attracted more than
ITWO seeks investment results, before fees and expenses, that track the performance of the Cboe Russell 2000 Daily Covered Call Index (the “Index”). The Index is designed to replicate the performance of an investment strategy that combines a long position in the Russell 2000 Index with a short position in Russell 2000 Index call options. In particular, the Index is designed to replicate a daily covered call strategy that sells call options with one day to expiration each trading day. ITWO invests in Russell 2000 stocks and uses swap agreements to gain exposure to daily call options.
About ProShares
ProShares has been at the forefront of the ETF revolution since 2006. ProShares now offers one of the largest lineups of ETFs, with more than
1Source: Morningstar. As of August 22, 2024.
Disclosures
The Funds seek to replicate a daily covered call strategy by investing in equity securities and derivatives. The Funds do not sell (write) call options.
This is not intended to be investment advice.
Investing involves risk, including the possible loss of principal. These ProShares ETFs are non-diversified and entail certain risks, including risks associated with the use of derivatives (swap agreements, futures contracts and similar instruments), investments in smaller companies, imperfect benchmark correlation, and market price variance, all of which can increase volatility and decrease performance. Please see summary and full prospectuses for a more complete description of risks on ProShares.com. Shares of any ETF are generally bought and sold at market price (not NAV) and are not individually redeemed from the fund. Your brokerage commissions will reduce returns.
There is no guarantee any ProShares ETF will achieve its investment objective. The performance of the Funds may not correspond to the performance of their respective indexes, the Funds may not be successful in generating income for investors, and the Funds may not capture returns that traditional covered call strategies may sacrifice.
The S&P 500 Daily Covered Call Index replicates the performance of a covered call investment strategy that combines a long position in the S&P 500 Index with a short position in S&P 500 Index call options. The Nasdaq-100® Daily Covered Call Index replicates the performance of a covered call investment strategy that combines a long position in the Nasdaq-100 Index with a short position in Nasdaq-100 Index® call options. The Cboe Russell 2000 Daily Covered Call Index replicates the performance of a covered call investment strategy that combines a long position in the Russell 2000 Index with a short position in Russell 2000 Index call options. In particular, each index is designed to replicate a daily covered call strategy that sells call options with one day to expiration each day. Each Fund intends to make distributions each month of an amount that reflects the dividends and call premium income earned by a daily covered call strategy on its index (net of expenses). There can be no guarantee that the Funds will make distributions, and the amount of such distributions, if any, may vary significantly from month to month. Some or all of such distributions may be characterized as a return of capital.
Carefully consider the investment objectives, risks, charges and expenses of ProShares before investing. This and other information can be found in their summary and full prospectuses at ProShares.com.
The S&P 500 Daily Covered Call Index is a product of S&P Dow Jones Indices LLC and its affiliates and has been licensed for use by ProShares. "S&P®" is a registered trademark of Standard & Poor's Financial Services LLC ("S&P") and "Dow Jones®" is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones") and have been licensed for use by S&P Dow Jones Indices LLC and its affiliates. ProShares have not been passed on by S&P Dow Jones Indices LLC and its affiliates as to their legality or suitability. ProShares based on the S&P 500 Daily Covered Call Index are not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P or their respective affiliates, and they make no representation regarding the advisability of investing in ProShares. THESE ENTITIES AND THEIR AFFILIATES MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO PROSHARES.
Nasdaq®, Nasdaq-100 Index®, Nasdaq-100®, NDX®, Nasdaq-100 Daily Covered Call™ Index, NDXDCC™, Nasdaq-100 Daily Covered Call Option™ Index, NDXDCCOV™, Nasdaq-100 Daily Covered Call Income™ Index, NDXDCCI™, are registered trademarks of Nasdaq, Inc. (which with its affiliates and third party licensors is referred to as the “Corporations”) and are licensed for use by ProShare Advisors LLC. The Product(s) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).
London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). ©LSE Group 2024. FTSE Russell is a trading name of certain of the LSE Group companies. The “Cboe Russell 2000 Daily Covered Call Index”, and “Russell®” are trademarks of the relevant LSE Group companies and are used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company’s express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication.
ProShares ETFs (ProShares Trust and ProShares Trust II) are distributed by SEI Investments Distribution Co., which is not affiliated with the funds' advisor or sponsor.
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Media Contact
Tucker Hewes, Hewes Communications, Inc., (212) 207-9451, tucker@hewescomm.com
Investor Contact
ProShares, (866) 776-5125, ProShares.com
Source: ProShares
FAQ
What is the ticker symbol for ProShares Russell 2000 High Income ETF?
How does ITWO differ from conventional covered call ETFs?
What index does the ProShares Russell 2000 High Income ETF (ITWO) track?
When did ProShares launch the Nasdaq-100 High Income ETF (IQQQ)?
