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SPYT, S&P 500 Income Target ETF
MIAMI, March 7, 2024 (Globe Newswire) — Defiance ETFs, a leading provider of option income exchange traded funds, is pleased to announce the launch of SPYT. SPYT’s pioneering strategy aims to use options to achieve a target annual return of 20% of the S&P 500. The fund aims to make stable monthly distributions.
Strategy overview:
SPYT’s strategy revolves around owning shares in ETFs that track the performance of the S&P 500 while simultaneously shorting the index’s daily credit call spreads. This innovative approach is designed to maximize return potential while preserving upward growth opportunities for investors.
Potential yield improvement:
The core of SPYT’s options strategy is selling call options combined with buying call options at higher strike prices. SPYT aims to leverage short-term options to provide investors with “enhanced” yields compared to traditional options-based strategies.
Generate stable income:
SPYT’s investment approach is specialized in generating income through option premiums derived from the sale of index call spreads. This income generation strategy is the primary driver of the fund’s yield, with a specific goal of achieving an annualized income level of 20%.
transaction:
SPYT actively sells S&P 500 credit call spreads on a daily basis, focusing on options that are close to expiration. This involves selling a call option at or near the money strike price while simultaneously buying a call option above that strike price. If the value of the S&P 500 exceeds the upper limit of the strike price, SPYT can profit from further increases in the value of the index.
SPYT’s innovative approach to income generation through options trading provides investors with a unique opportunity to participate in the potential upside of the S&P 500 while aiming for attractive and stable monthly income payments .
About Defiance ETF
Founded in 2018, Defiance is a leading ETF sponsor specializing in income and thematic investing. Our actively managed options ETFs are designed to drive returns, and our series of first-mover theme ETFs help investors explore artificial intelligence, machine learning, quantum computing, 5G, hydrogen energy, and electric vehicles.
important disclosure
SPYT Disclosure: Defiance ETFs LLC is the sponsor of the ETF. The Fund’s investment advisor is Toroso Investments, LLC (“Toroso” or the “Adviser”). The investment subadviser is ZEGA Financial, LLC (“ZEGA” or “Subadviser”).
Fund holdings and sector allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security.
You should carefully consider a Fund’s investment objectives, risks, charges and expenses before investing. The prospectus contains this and other important information about the investment company. Please read carefully before investing. A hard copy of the prospectus may be requested by calling 833.333.9383.
Past performance does not guarantee future results. A high rating does not guarantee good performance.
Investments involve risk. There is a possibility of loss of principal. As an ETF, the Fund may trade at a premium or discount to its NAV. ETF shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Portfolios that are concentrated in a single industry or country may be exposed to higher risks.
Index overview: The S&P 500 Index is widely recognized as a benchmark index that tracks the performance of the 500 largest companies in the United States listed on the New York Stock Exchange or Nasdaq. These companies represent approximately 80% of the total U.S. stock market by market capitalization, making them a large-cap index.
Indirect Investment Risks. The Index is not affiliated with, or in any way involved with, the Trust, Fund, Advisor, Sub-Adviser or any of their respective affiliates. Investors in the Fund will not be entitled to receive dividends or other distributions with respect to the companies that make up the Index, and the performance of the Index may suffer.
Risks of index trading. The index’s trading price is highly volatile and may continue to fluctuate significantly depending on a variety of factors. Stock markets generally experience extreme price and volume fluctuations that are unrelated or disproportionate to company performance.
S&P 500 Index Risks: The index includes a broad range of large U.S. companies and is primarily influenced by overall economic and market conditions. Recessions, inflation, and changes in interest rates can have a significant impact on index performance. Furthermore, despite its diverse representation, weakness in key sectors such as technology and finance can have a noticeable impact on the index. Geopolitical risks and unforeseen global events, such as pandemics, can create volatility and uncertainty.
Derivative Risks. Derivatives are financial instruments that derive value from an underlying reference asset, such as a stock, bond, fund (including ETF), interest rate, or index. The Fund’s investments in derivatives are subject to market-related risks, imperfect correlation with the underlying assets, high price volatility, lack of availability, lack of counterparties, and other risks associated with securities and other may be subject to risks in addition to those associated with investing in . Risk, Liquidity, Valuation and Legal Limitations.
Counterparty Risk. A Fund is exposed to counterparty risk by investing in option contracts. Trades in some types of derivatives, including options, must be centrally cleared (“Cleared Derivatives”).
option contract. The use of option contracts involves different investment strategies and risks than those associated with regular portfolio securities transactions. Option prices are volatile and are affected by, among other things, actual and expected changes in the value of the underlying instrument, including expected volatility. This is influenced by fiscal and monetary policy, domestic and international politics. Actual or implied volatility, or reference asset, time remaining until expiration of option contract, and economic events.
Distribution Risk. As part of the Fund’s investment objective, the Fund seeks to provide current monthly income. There is no guarantee that the Fund will make distributions in any particular month. If the Fund makes distributions, the amount of the distributions may vary significantly from distribution to distribution. Additionally, if there are monthly distributions, those distributions may consist of a return on capital, reducing the Fund’s NAV and trading price over time. As a result, investors may suffer significant losses on their investments.
There can be no assurance that the Fund’s investment strategy will be successfully implemented, and investors may lose some or all of their investment.
Neither the Fund, the Trust, the Adviser, any sub-advisors nor their respective affiliates make any representations to you regarding the performance of the Index. The Fund, Trust, Adviser and Sub-Adviser are not affiliated with or endorsed by the Index.
New fund risks: The Fund is a newly established management investment company and does not have any operational experience. As a result, prospective investors have no track record or history on which to base their investment decisions.
credit call spread is an option trading strategy in which an investor sells a call option and simultaneously buys another call option with the same expiration date and a higher strike price. The premium received on the sale of the call option is higher than the premium paid on the purchase of the call option, resulting in a net credit to the investor’s account. This strategy is used when the investor expects the price of the underlying asset to fall by expiry or remain below the floor strike price, allowing him to keep his net credit as profit. If the price of the underlying asset increases significantly, the purchased call option provides protection, thus limiting potential losses.
call option Gives the buyer the right, but not the obligation, to purchase an asset at a set price within a specified time period.
Selling call options A price at or near the money strike price involves offering a call option with a strike price close to the current market price of the underlying asset.
Diversification does not guarantee a profit or protect against loss in a declining market.
Transactions may be subject to fees.
SPYT is distributed by Foreside Fund Services, LLC.
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/868bfe26-70c2-4e86-aaa7-c0014ea57854.
CONTACT: David Hanono Defiance ETFs +1 833-333-9383
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