ISPY: A New Spin On Covered Call ETFs From ProShares Yielding Over 9%
ISPY's daily call option strategy has outperformed traditional monthly covered call ETFs, showing an 11.24% gain and a 19.81% ROI in 2024. ISPY invests 80% in S&P 500 companies and uses daily call options, generating high income and closely mimicking market returns. Despite market risks, ISPY's strategy offers high-single digit yields, making it an attractive option for income-focused investors.
ISPY: Daily Covered-Call Fund Outperforms In Rising Markets
The ProShares S&P 500 High Income ETF sells daily covered calls on the S&P 500 Index to generate high distribution yields for investors. ISPY has outperformed the more well-known JEPI ETF since its inception, as its use of daily call options effectively resets its performance cap daily, allowing ISPY to capture more upside. However, by the same token, the ISPY ETF should underperform in down markets, as it receives less option premium to cushion drawdowns.
ISPY Vs. JEPI For Large-Cap Exposure And Higher Income
ProShares S&P 500 High Income ETF (ISPY) offers enhanced income compared to SPDR S&P 500 ETF (SPY). That ETF is reviewed in detail. JPMorgan Equity Premium Income ETF (JEPI) would be considered a competitor and is well known. I also review this ETF. ISPY started in late 2023 and has outperformed JEPI so far in 2024. While a few months doesn't mean long-term outperformance, I still give the ISPY ETF a Buy rating.
ISPY: S&P 500 With A Covered Call Overlay (Through Swaps)
ProShares S&P 500 High Income ETF uses covered call strategies to enhance yield and provide exposure to the S&P 500 Index. The ISPY fund has a yield of 3.46%, higher than the S&P 500 ETF's yield of 1.27%. ISPY may underperform in bull markets but can provide downside protection in a bear market.
