Roundhill S&P 500 Target 20 Managed Distribution ETF (XPAY)

Overview

The fund operates with a clear focus on deriving current income on a weekly basis while simultaneously offering exposure to the price return of the Russell 2000 Index, primarily aimed at capturing the growth and dynamics of small-cap markets. It employs a synthetic covered call strategy, an innovative financial approach centered around options contracts, to achieve its investment objectives. By dedicating at least 80% of its net assets, alongside any borrowed funds dedicated to investment purposes, towards financial instruments that hinge on the Russell 2000 Index as the reference asset, the fund showcases a strong inclination towards leveraging the performance of small-cap companies. Despite its concentrated exposure that classifies it as non-diversified, the fund's strategy is intricately designed to balance current income generation with the inherent volatility of small-cap investments.

Products and Services

• Synthetic Covered Call Strategy

  This strategy is the cornerstone of the fund's operation, designed to generate current income on a weekly basis. It involves the use of options contracts, a type of financial derivative, as a mechanism to provide investors with income while also allowing them to participate in the price movements of the Russell 2000 Index. This dual benefit acts as a hedge against the volatility of small-cap investments, offering a streamlined path for investors seeking exposure to this segment with a mitigated level of risk.

• Exposure to the Russell 2000 Index

  By ensuring that at least 80% of its net assets are invested in financial instruments that use the small-cap Russell 2000 Index as the reference asset, the fund provides a significant opportunity for investors to gain exposure to the dynamics of small-cap companies. This strategic focus not only underscores the fund's commitment to leveraging the growth potential inherent in the small-cap sector but also enhances the diversification of an investor's portfolio by including a broad spectrum of companies within the Russell 2000 Index.