Optimized Equity Income ETF (OEI)

Overview

OEI targets a strategic allocation of approximately 90% to large-cap U.S. equities, leveraging an options overlay strategy to enhance returns. The fund's stock selection process combines top-down market analysis, focusing on key factors such as value, quality, and volatility, alongside rigorous bottom-up research that delves into company fundamentals and earnings potential. This dual approach allows for a well-rounded investment strategy aiming to capitalize on market opportunities while also managing risk.

Additionally, to generate income that exceeds typical dividend yields, the fund engages in writing out-of-the-money (OTM) call options on individual stocks, equity indexes, or exchange-traded funds (ETFs). The options are typically written on 25-75% of the fund's equity holdings, where each contract covers a specified portion of the underlying assets. These options usually have expiration dates ranging from one to six months. The fund may also employ a strategy of purchasing OTM put and call options, thereby facilitating the retention of upside potential while simultaneously providing a cushion against downside risk.

The overarching investment approach seeks to deliver a consistent income stream while aiming for reduced volatility when compared to traditional equity ETFs. However, it is important to note that this strategy may limit the upside potential during strong bull markets due to the nature of call-writing. Furthermore, the fund may exhibit a high portfolio turnover rate as it actively manages its holdings to align with market movements and opportunities.

Products and Services

• Large-Cap U.S. Equities

  OEI primarily focuses on allocating a significant portion of the portfolio to large-cap U.S. equities. This choice is strategic, as large-cap stocks typically offer stability and liquidity, making them a suitable foundation for the fund's investment approach.

• Options Overlay Strategy

  The fund employs an options overlay strategy that includes writing OTM call options and purchasing OTM puts and calls. This strategy is designed to generate additional income while managing risk. Writing call options allows the fund to secure returns beyond dividends, while buying puts can safeguard against potential losses.

• Top-Down Market Analysis

  In its stock selection process, the fund conducts extensive top-down market analysis, evaluating macroeconomic factors, industry trends, and market conditions. This analysis helps in identifying attractive investment opportunities based on value and quality metrics.

• Bottom-Up Research

  The fund complements its market analysis with bottom-up research focused on individual company fundamentals and earnings potential. This dual approach ensures that investment decisions are well-informed and aligned with the fund’s overall strategic goals.

• Portfolio Management and Turnover

  OEI actively manages its portfolio with a focus on maximizing returns while minimizing risk. The fund may experience a high portfolio turnover rate, reflecting its responsive nature to changing market dynamics and investment opportunities.