ETB - PAPI: A New Call Writing ETF

2024-04-11 13:10:18 ET

Summary

• Parametric Equity Premium Income ETF is a new call-writing fund that aims to provide monthly distributions to its investors.
• The PAPI ETF has a lower expense ratio compared to the average ETF and is still actively managed.
• The fund's portfolio is quite diversified and evenly split across sectors, minimizing single-holding risk.
• I initially believed this may have been a suitable alternative to Eaton Vance's call writing CEFs, but they took this fund in a slightly different direction.

Written by Nick Ackerman, co-produced by Stanford Chemist.

There have been several new call-writing ETF launches over the last several years. These funds are designed to provide higher relative distributions to income-focused investors. They primarily do this by investing in a diversified basket of equity securities that provide regular dividends. Another source of these distributions paid out to investors comes from the option premiums the funds can receive from writing options....

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