NEW YORK, July 26, 2023 - Global X ETFs, the New York-based provider of exchange-traded funds (ETFs), today announced the launch of the Global X Dow 30 Covered Call & Growth ETF (DYLG). The fund is Global X's latest addition to its Income family, which offers investors ETF strategies that look beyond traditional fixed income to help increase or diversify a portfolio's yield potential.
Market movements in the United States in recent months have been heavily affected by the Federal Reserve's (Fed) interest rate decisions as well as economic data surrounding inflation and labor market strength—spurring uncertainty in both equities and fixed income markets. However, with rate hikes possibly nearing a plateau, investors looking ahead may want to balance their income and growth potential. They may seek to position their portfolios in an effort to capture some market upside in the longer term while still enjoying wider premiums from today's elevated volatility.
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 frequent 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. As a covered call & growth strategy, DYLG writes calls on only half of the portfolio, allowing investors to still capture half the upside potential of the underlying index, the Cboe DJIA Half BuyWrite Index.
"As investors weigh market uncertainty against a potential end in Fed rate hikes and a strong underlying labor market, Covered Call & Growth Strategies can be an effective way to navigate choppy markets while maintaining some upside potential," said Rohan Reddy, Director of Research at Global X ETFs. "By buying the stocks in the Dow Jones, DYLG can help achieve a balance between growth and income while also helping investors diversify away from other major domestic indices."
The fund is designed to track the Cboe DJIA Half BuyWrite Index, which measures the performance of a covered call strategy that holds a theoretical portfolio of the underlying stocks of the Dow Jones Industrial Average and sells a succession of one-month at-the-money covered call options on the Dow Jones Industrial Average. The Cboe DJIA Half BuyWrite Index reflects the performance of the component securities of the DJIA Index combined with written (sold) at-the-money call options corresponding to the value of 50% of the value of the portfolio of stocks.
DYLG will join the Global X Income suite of over two dozen ETFs and $20 billion in assets under management.i
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 over 100 ETF strategies and over $40 billion in assets under management.ii While we are widely recognized for our Thematic Growth, Income, Commodity, and International Access ETFs, we also offer Core, Risk Management, Digital Asset, and other solutions to suit a 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 $520 billion in assets under management worldwide.iii Mirae Asset has an extensive global ETF platform ranging across the US, Brazil, Canada, Colombia, Europe, Hong Kong, India, Japan, Korea, and Vietnam with over $80bn in assets under management.iv
Media Contact:
Ariel Kouvaras, Sloane PR
212-446-1884
akouvaras@sloanepr.com
Important Disclosures:
Strategies discussed may not be suitable for all investors. Please consult a financial professional for more information regarding your investment situation.
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 the Funds to loss due to adverse occurrences that may affect that industry or sector. Investors should be willing to accept a high degree of volatility in the price of the funds' shares and the possibility of significant losses.
The fund engages 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 and writing a call option on that same asset with the goal of realizing additional income from the option premium. 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 continue to bear the risk of a decline in the index. A liquid market may not exist for options held by the funds. 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. DYLG is non-diversified.
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 full or summary prospectuses, which may be obtained 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., which is not affiliated with Global X Management Company LLC or Mirae Asset Financial Group.
i Source: Global X, as of 7/17/23
ii Source: Global X, as of 7/17/23
iii Mirae Asset, as of July 2023
iv Mirae Asset, as of July 2023
SOURCE Global X Management Company LLC
