Defiance Launches SPYT, the S&P 500 Income Target ETF. Seeks 20% annual yield.
SPYT, the S&P 500 Income Target ETF
MIAMI, March 07, 2024 (GLOBE NEWSWIRE) -- Defiance ETFs, a leading provider of options income exchange-traded funds, is excited to announce the launch of SPYT. SPYT's pioneering strategy aims to achieve a target annual income of 20% in the S&P 500 using options. The fund aims for consistent monthly distributions.
Strategy Overview:
SPYT's strategy revolves around holding shares of ETFs tracking the S&P 500's performance while simultaneously engaging in the selling of daily credit call spreads on the Index. This innovative approach is designed to maximize income potential while retaining upside growth opportunities for investors.
Enhanced Potential Yield:
At the core of SPYT's options strategy lies the selling of call options paired with the purchase of call options at higher strike prices. Leveraging short-term options, SPYT aims to provide investors with an "enhanced" yield compared to traditional option-based strategies.
Consistent Income Generation:
SPYT's investment approach is dedicated to generating income through option premiums derived from selling Index call spreads. This income generation strategy serves as the primary driver of the Fund's yield, with a specific target of achieving an annualized income level of 20%.
Trading:
On a daily basis, SPYT actively sells credit call spreads on the S&P 500, with a focus on options with near-term expiration dates. This entails selling call options at or near the money strike prices while simultaneously purchasing call options above that strike price. In the event that the S&P 500 value surpasses the upper strike price, SPYT stands to profit from further upside appreciation in the Index's value.
SPYT's innovative approach to income generation through options trading offers investors a unique opportunity to participate in the potential upside of the S&P 500 while aiming to receive attractive yet consistent monthly income payouts.
About Defiance ETFs
Founded in 2018, Defiance stands as a leading ETF sponsor dedicated to income and thematic investing. Our actively managed options ETFs are designed to enhance income while our suite of first-mover thematic ETFs empower investors to express targeted views on dynamic sectors leading the way in disruptive innovations, including artificial intelligence, machine learning, quantum computing, 5G, hydrogen energy, and electric vehicles.
Important Disclosures
SPYT Disclosure: Defiance ETFs LLC is the ETF sponsor. The Fund’s investment adviser is Toroso Investments, LLC (“Toroso” or the “Adviser”). The investment sub-adviser is ZEGA Financial, LLC (“ZEGA” or the “Sub-Adviser”).
Fund holdings and sector allocations are subject to change at any time and should not be considered recommendations to buy or sell any security.
The Funds' investment objectives, risks, charges, and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company. Please read carefully before investing. A hard copy of the prospectuses can be requested by calling 833.333.9383.
Past performance is no guarantee of future results. High ratings does not assure favorable performance.
Investing involves risk. Principal loss is possible. As an ETF, the funds may trade at a premium or discount to NAV. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. A portfolio concentrated in a single industry or country, may be subject to a higher degree of risk.
Index Overview: The S&P 500 Index is a widely recognized benchmark index that tracks the performance of 500 of the largest U.S.-based companies listed on the New York Stock Exchange or Nasdaq. These companies represent approximately 80% of the total U.S. equities market by capitalization, making it a large-cap index.
Indirect Investment Risk. The Index is not affiliated with the Trust, the Fund, the Adviser, the Sub-Adviser, or their respective affiliates and is not involved with this offering in any way. Investors in the Fund will not have the right to receive dividends or other distributions or any other rights with respect to the companies that comprise the Index but will be subject to declines in the performance of the Index.
Index Trading Risk. The trading price of the Index may be highly volatile and could continue to be subject to wide fluctuations in response to various factors. The stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies.
S&P 500 Index Risks: The Index, which includes a broad swath of large U.S. companies, is primarily exposed to overall economic and market conditions. Recession, inflation, and changes in interest rates can significantly impact the index’s performance. Furthermore, despite its diverse representation, a downturn in a major sector such as technology or financials could notably affect the index. Geopolitical risks and unexpected global events, like pandemics, can introduce volatility and uncertainty.
Derivatives Risk. Derivatives are financial instruments that derive value from the underlying reference asset or assets, such as stocks, bonds, or funds (including ETFs), interest rates or indexes. The Fund’s investments in derivatives may pose risks in addition to, and greater than, those associated with directly investing in securities or other ordinary investments, including risk related to the market, imperfect correlation with underlying investments, higher price volatility, lack of availability, counterparty risk, liquidity, valuation and legal restrictions.
Counterparty Risk. The Fund is subject to counterparty risk by virtue of its investments in options contracts. Transactions in some types of derivatives, including options, are required to be centrally cleared ("cleared derivatives").
Options Contracts. The use of options contracts involves investment strategies and risks different from those associated with ordinary portfolio securities transactions. The prices of options are volatile and are influenced by, among other things, actual and anticipated changes in the value of the underlying instrument, including the anticipated volatility, which are affected by fiscal and monetary policies and by national and international political, changes in the actual or implied volatility or the reference asset, the time remaining until the expiration of the 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 assurance that the Fund will make a distribution in any given month. If the Fund does make distributions, the amounts of such distributions will likely vary greatly from one distribution to the next. Additionally, the monthly distributions, if any, may consist of returns of capital, which would decrease the Fund's NAV and trading price over time. As a result, an investor may suffer significant losses to their investment.
There is no guarantee that the Fund’s investment strategy will be properly implemented, and an investor may lose some or all of its investment.
None of the Fund, the Trust, the Adviser, the Sub-Adviser, or their respective affiliates makes any representation to you as to the performance of the Index. THE FUND, TRUST, ADVISER, AND SUB-ADVISER ARE NOT AFFILIATED WITH, NOR ENDORSED BY, THE INDEX.
New Fund Risk: The Fund is a recently organized management investment company with no operating history. As a result, prospective investors do not have a track record or history on which to base their investment decisions.
A credit call spread is an options trading strategy where an investor simultaneously sells a call option and buys another call option with the same expiration date but at a higher strike price. The premium received from selling the call option is higher than the premium paid for buying 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 either decrease or remain below the lower strike price by expiration, allowing them to keep the net credit as profit. It limits potential losses because the purchased call option provides protection if the price of the underlying asset rises significantly.
A call option gives the buyer the right, but not the obligation, to buy an asset at a set price within a specified time.
Selling call options at or near the money strike prices involves offering call options with strike prices close to the current market price of the underlying asset.
Diversification does not ensure a profit nor protect against loss in a declining market.
Commissions may be charged on trades.
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
