MFOHome About Commentary Discussions Funds The Best Resources Support Us!

Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Sign In Register

Categories

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

ISPY

dryflower
in Fund Discussions
Has anyone taken a look at ISPY? It is ProShares S&P500 High Income etf.

They have been able to make a monthly distribution that equals about 10% annually. This is achieved by owning the S&P500 and taking the income from selling daily call options -- except they don't actually buy any options. Instead they use swaps. I have tried, but I can only vaguely understand what a swap is.

My uninformed and dubious take is that they will probably marginally trail the S&P500 in bull markets, and may slightly outperform in bear markets, but a monthly check of that size is enticing.

Comments

  • BaluBalu
    It helps to link to the fund web page and any other source material you already looked at.
  • dryflower
    Sure:

    https://www.proshares.com/our-etfs/strategic/ispy
  • CrashCrash
    edited January 8
    https://www.stockrover.com/world/insight/summary/Quotes/ISPY
    (Doggy poopies! That link does not let you hold that particular security. Just type it into the search box.)
    "Derivative income" style. Enough to scare me away. Remember The Big Short.

    P/E 27. Unattractively high.....
    Div. yield listed I see is 5.9%.

    My point is: you can grab a better div. without resorting to risky derivatives. ET (MLP, K-1 tax form) is still spinning off 6.5% and my newest darling can ALMOST match that 5.9%. It's BLX, with its own 5.4% div yield. The BDC outfit known as Ares ARCC will give you 8.7% yield.
  • BaluBalu
    dryflower said:

    Sure:

    https://www.proshares.com/our-etfs/strategic/ispy

    This is just a plain vanilla covered call strategy, targeting 100% of notional amount. I am surprised they need 0.55% ER for something that can be automated. Pro shares are reputable with derivatives and may be they can get better pricing on the calls sold. Look around to see who else offers similar product and how that compares to ISPY.

    Is the income paid by the fund entirely ordinary income or about 50% OI and 50% long term cap gain?

    I can do better by buying SPY and selling 1/12th of 10% of SPY every month
  • BaluBalu
    I am looking for hedge equity funds that invest in an equity index. Pl share tickers.
Sign In or Register to comment.