FFA - FFA: If You Want To Buy Equities Buy Them With A Discount
2024-03-27 05:25:58 ET
Summary
- Equities have rallied into 2024, surpassing year-end forecasts and creating a bullish sentiment among retail investors.
- The First Trust Enhanced Equity Income Fund is a buy-write fund that closely tracks the S&P 500 and offers a discount to NAV.
- FFA has a dynamic options overlay strategy and a low proportion of its portfolio overwritten with calls, making it an attractive alternative to buying the S&P 500 outright.
Thesis
Equities have rallied into 2024, smashing year-end forecasts already, especially when looking at the S&P 500. Investment banks have jumped on the bandwagon, revising their year-end targets higher, thus creating a sentiment of bullishness in the market among retail investors. If you are looking at entering the market today, it is worth noting you do not have to buy the S&P 500 outright via [[SPY]], but you can use a plethora of other instruments that can achieve a similar goal with a different risk/reward profile....
FFA: If You Want To Buy Equities, Buy Them With A Discount