Global X ETFs Announces Launch of Two ESG Covered Call Funds
NEW YORK, Feb. 22, 2023 /PRNewswire/ -- Global X ETFs, the New York-based provider of exchange-traded funds (ETFs), today announced the launch of the Global X S&P 500 ESG Covered Call ETF (XYLE) and the Global X Nasdaq 100 ESG Covered Call ETF (QYLE). These two funds represent Global X's latest additions to its growing suite of options-based funds.
Covered call strategies can play an important role in the modern investor's portfolio, offering a diversified potential source of income while potentially mitigating downside risks. Historically, covered call strategies required investors to trade options themselves, a task requiring expertise and hands-on trading. But the availability of exchange-traded funds that incorporate covered call strategies can help investors efficiently add these strategies to their portfolios. These new funds will provide investors with access to a covered call strategy while selecting for securities that meet certain sustainability criteria relating to Environmental, Social, and Governance (ESG) factors.
"Many investors turn to covered call strategies as they navigate uncertain economic conditions amid rising rates and fears of a market downturn," said Rohan Reddy, Director of Research at Global X ETFs. "With the launch of these new ETF strategies, we are providing investors with two products that will allow them to invest in the equities of companies displaying positive ESG characteristics while also potentially generating income and monetizing volatility."
The Global X S&P 500 ESG Covered Call ETF (XYLE) and the Global X Nasdaq 100 ESG Covered Call ETF (QYLE) seek to provide investment results that correspond, before fees and expenses, to the Cboe S&P 500 ESG BuyWrite Index and the Nasdaq-100 ESG BuyWrite Index respectively. The funds have expense ratios of 0.60%.
About Global X ETFs
Global X ETFs was founded in 2008. For more than a decade, our mission has been empowering investors with unexplored and intelligent solutions. Our product lineup features more than 100 ETF strategies and over $38 billion in assets under management.i While we are distinguished for our Thematic Growth, Income, and International Access ETFs, we also offer Core, Commodity, and Alpha funds to suit a wide range of investment objectives. Explore our ETFs, research and insights, and more at www.globalxetfs.com.
Global X is a member of Mirae Asset Financial Group, a global leader in financial services, with more than $480 billion in assets under management worldwide.ii Mirae Asset has an extensive global ETF platform ranging across the U.S., Brazil, Canada, Colombia, Europe, Hong Kong, India, Japan, Korea, and Vietnam with over $80 billion in assets under management.iii
Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit or guarantee against a loss. Concentration in a particular industry or sector will subject XYLE and QYLE to losses due to adverse occurrences that may affect that industry or sector. Investors in XYLE and QYLE should be willing to accept a high degree of volatility in the price of the fund's shares and the possibility of significant losses. QYLE is non-diversified.
XYLE and QYLE engage in options trading. An option is a contract sold by one party to another that gives the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed upon price within a certain period or on a specific date. A covered call option involves holding a long position in a particular asset, in this case U.S. common equities, and writing a call option on the same asset with the goal of realizing additional income from the option premium. XYLE and QYLE write covered call index options on the S&P 500 ESG Index and the Nasdaq 100, respectively. By selling covered call options, the fund limits its opportunity to profit from an increase in the price of the underlying index above the exercise price, but continues to bear the risk of a decline in the index. A liquid market may not exist for options held by the fund. While the fund receives premiums for writing the call options, the price it realizes from the exercise of an option could be substantially below the indices current market price.
Companies with favorable ESG attributes may underperform the stock market as a whole. As a result, the Fund may underperform other funds that do not screen companies based on ESG attributes. The criteria used to select companies for investment may result in the Fund investing in securities, industries or sectors that underperform the market as a whole, forgoing opportunities to invest in securities that might otherwise be advantageous to buy or underperform other funds screened for ESG standards.
Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.
Carefully consider the Fund's investment objectives, risks, and charges and expenses before investing. This and other information can be found in the Fund's summary or full prospectuses, which can be found at globalxetfs.com. Please read the prospectus carefully before investing.
Global X Management Company LLC serves as an advisor to Global X Funds. The Funds are distributed by SEI Investments Distribution Co. (SIDCO), which is not affiliated with Global X Management Company LLC or Mirae Asset Global Investments.
i Global X, as of February 2023
ii Mirae Asset, as of December 2022
iii Mirae Asset, as of December 2022
Media Contact: Naomi Sussis, email@example.com
SOURCE Global X Management Company LLC