6 March 2025: Investment Product Ideas

Market Remains Volatile, Enhancing with Covered Calls and Low-Vol Strategies

• The current market environment is marked by heightened uncertainty, geopolitical tensions, and fluctuating economic indicators, making traditional investment strategies increasingly challenging. Persistent volatility has become a defining feature, underscoring the need for approaches that emphasize capital preservation and consistent income generation. In this context, covered call writing strategies and low-volatility ETFs present compelling solutions. Covered calls provide a way to generate steady income while offering some downside protection, while low-volatility ETFs help mitigate risk by focusing on stable, less volatile assets. By integrating these strategies, investors can build a resilient portfolio that not only navigates market turbulence but also delivers stable returns, making them well-suited for the current unpredictable macroeconomic conditions.
  

Invesco S&P 500 Low Volatility ETF (SPLV US)

• Low Volatility
  
  This ETF tracks an index that selects and holds at least 100 of the lowest-volatility stocks within the S&P 500, resulting in a relatively stable performance during market fluctuations.
  
• Inverse Volatility Weighting
  
  The ETF employs an inverse volatility weighting methodology, assigning higher weights to stocks with lower volatility. No single stock exceeds 2% weight, with the top 10 holdings comprising approximately 12.05% of the portfolio.
  
• Lower Expense Ratio
  
  With an expense ratio of 0.25%, this ETF is cost-effective compared to similar funds, helping investors reduce investment costs.
  

Fund Name (Ticker)	Invesco S&P 500® Low Volatility ETF (SPLV US)
Description	The Invesco S&P 500® Low Volatility ETF (Fund) is based on the S&P 500® Low Volatility Index (Index). The Fund will invest at least 90% of its total assets in the securities that comprise the Index. The Index is compiled, maintained and calculated by Standard & Poor’s and consists of the 100 securities from the S&P 500® Index with the lowest realized volatility over the past 12 months. Volatility is a statistical measurement of the magnitude of up and down asset price fluctuations over time. The Fund and the Index are rebalanced and reconstituted quarterly in February, May, August and November.
Asset Class	Equity
30-Day Average Volume (as of 4 Mar)	1,467,406
Net Assets of Fund (as 4 Mar)	$7,624,300,000
12-Month Yield (as of 4 Mar)	1.72%
P/E Ratio (as of 4 Mar)	24.76x
P/B Ratio (as of 4 Mar)	3.74x
Expense Ratio (Annual)	0.25%

Top Holdings

(as of 3 March 2025)

(Source: Bloomberg)

Global X S&P 500 Covered Call ETF (XYLD US)

• Covered Call Strategy
  
  This ETF follows a covered call strategy by holding stocks while selling call options on the underlying securities, generating additional income through option premiums.
  
• Monthly Dividend Payouts
  
  While the S&P 500 index has historically yielded around 1.8% annually over the past decade, this ETF enhances income through both dividends and option premiums, making it suitable for income-focused investors with a monthly distribution mechanism.
  
• Reducing Portfolio Volatility
  
  With S&P 500 valuations remaining elevated by historical standards, this ETF is an option for investors looking to reduce volatility in their U.S. large-cap equity exposure.
  

Fund Name (Ticker)	Global X S&P 500 Covered Call ETF (XYLD US)
Description	The Global X S&P 500 Covered Call ETF (XYLD) seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Cboe S&P 500 BuyWrite Index.
Asset Class	Equity
30-Day Average Volume (as of 4 Mar)	660,976
Net Assets of Fund (as of 3 Mar)	$3.25B
12-Month Yield (as of 3 Mar)	12.16%
P/E Ratio (as of 3 Mar)	21.39x
P/B Ratio (as of 3 Mar)	4.15x
Expense Ratio (Annual)	0.60%

Top 10 Holdings

(as of 4 March 2025)

(Source: Bloomberg)