BETHESDA, Md.--(BUSINESS WIRE)--ProShares, a premier provider of ETFs, today launched the ProShares Russell 2000 High Income ETF (CBOE: ITWO). With ITWO, investors can seek high income and target Russell 2000 returns over the long term.
“Covered call strategies have gained popularity for their high yield potential, but conventional covered call ETFs often sacrifice total return to generate that income,” said ProShares CEO Michael L. Sapir. “ITWO, the first Russell 2000 ETF powered by a daily call options strategy, expands our suite of first-to-market innovations in the fast-growing covered call category. The fund offers investors both the potential for high income and long-term total returns approximating that of the small-cap Russell 2000 Index.”
As a category, covered call ETFs have attracted more than $80 billion in assets.1 ProShares pioneered the use of a daily call options strategy in an ETF with the ProShares S&P 500 High Income ETF (ISPY), launched in December 2023, and the ProShares Nasdaq-100 High Income ETF (IQQQ) in March 2024. ITWO delivers a next-generation covered call strategy benchmarked to the small-cap Russell 2000 Index for investors who prefer a differentiated return profile relative to large-cap stock indexes.
ITWO seeks investment results, before fees and expenses, that track the performance of the Cboe Russell 2000 Daily Covered Call Index (the “Index”). The Index is designed to replicate the performance of an investment strategy that combines a long position in the Russell 2000 Index with a short position in Russell 2000 Index call options. In particular, the Index is designed to replicate a daily covered call strategy that sells call options with one day to expiration each trading day. ITWO invests in Russell 2000 stocks and uses swap agreements to gain exposure to daily call options.
About ProShares
ProShares has been at the forefront of the ETF revolution since 2006. ProShares now offers one of the largest lineups of ETFs, with more than $70 billion in assets. The company is the leader in strategies such as crypto-linked, dividend growth, interest rate hedged bond and geared (leveraged and inverse) ETF investing. ProShares continues to innovate with products that provide strategic and tactical opportunities for investors to manage risk and enhance returns.
1Source: Morningstar. As of August 22, 2024.
Disclosures
The Funds seek to replicate a daily covered call strategy by investing in equity securities and derivatives. The Funds do not sell (write) call options.
This is not intended to be investment advice.
Investing involves risk, including the possible loss of principal. These ProShares ETFs are non-diversified and entail certain risks, including risks associated with the use of derivatives (swap agreements, futures contracts and similar instruments), investments in smaller companies, imperfect benchmark correlation, and market price variance, all of which can increase volatility and decrease performance. Please see summary and full prospectuses for a more complete description of risks on ProShares.com. Shares of any ETF are generally bought and sold at market price (not NAV) and are not individually redeemed from the fund. Your brokerage commissions will reduce returns.
There is no guarantee any ProShares ETF will achieve its investment objective. The performance of the Funds may not correspond to the performance of their respective indexes, the Funds may not be successful in generating income for investors, and the Funds may not capture returns that traditional covered call strategies may sacrifice.
The S&P 500 Daily Covered Call Index replicates the performance of a covered call investment strategy that combines a long position in the S&P 500 Index with a short position in S&P 500 Index call options. The Nasdaq-100® Daily Covered Call Index replicates the performance of a covered call investment strategy that combines a long position in the Nasdaq-100 Index with a short position in Nasdaq-100 Index® call options. The Cboe Russell 2000 Daily Covered Call Index replicates the performance of a covered call investment strategy that combines a long position in the Russell 2000 Index with a short position in Russell 2000 Index call options. In particular, each index is designed to replicate a daily covered call strategy that sells call options with one day to expiration each day. Each Fund intends to make distributions each month of an amount that reflects the dividends and call premium income earned by a daily covered call strategy on its index (net of expenses). There can be no guarantee that the Funds will make distributions, and the amount of such distributions, if any, may vary significantly from month to month. Some or all of such distributions may be characterized as a return of capital.
Carefully consider the investment objectives, risks, charges and expenses of ProShares before investing. This and other information can be found in their summary and full prospectuses at ProShares.com.
The S&P 500 Daily Covered Call Index is a product of S&P Dow Jones Indices LLC and its affiliates and has been licensed for use by ProShares. "S&P®" is a registered trademark of Standard & Poor's Financial Services LLC ("S&P") and "Dow Jones®" is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones") and have been licensed for use by S&P Dow Jones Indices LLC and its affiliates. ProShares have not been passed on by S&P Dow Jones Indices LLC and its affiliates as to their legality or suitability. ProShares based on the S&P 500 Daily Covered Call Index are not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P or their respective affiliates, and they make no representation regarding the advisability of investing in ProShares. THESE ENTITIES AND THEIR AFFILIATES MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO PROSHARES.
Nasdaq®, Nasdaq-100 Index®, Nasdaq-100®, NDX®, Nasdaq-100 Daily Covered Call™ Index, NDXDCC™, Nasdaq-100 Daily Covered Call Option™ Index, NDXDCCOV™, Nasdaq-100 Daily Covered Call Income™ Index, NDXDCCI™, are registered trademarks of Nasdaq, Inc. (which with its affiliates and third party licensors is referred to as the “Corporations”) and are licensed for use by ProShare Advisors LLC. The Product(s) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).
London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). ©LSE Group 2024. FTSE Russell is a trading name of certain of the LSE Group companies. The “Cboe Russell 2000 Daily Covered Call Index”, and “Russell®” are trademarks of the relevant LSE Group companies and are used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company’s express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication.
ProShares ETFs (ProShares Trust and ProShares Trust II) are distributed by SEI Investments Distribution Co., which is not affiliated with the funds' advisor or sponsor.
