NEW YORK, April 22, 2019 /PRNewswire/ -- Global X ETFs, the
New York based provider of
exchange traded funds, today announced that it has launched the
Global X Russell 2000 Covered Call ETF (Cboe: RYLD), designed to
track the Cboe Russell 2000 BuyWrite Index. The fund gains exposure
to the stocks in the Russell 2000 Index and writes at-the-money
monthly call options on the same index. The fund receives a premium
from writing the call options, which can help increase the fund's
distributions and potentially mitigate downside risks.
The Russell 2000 Index primarily includes smaller market
capitalization U.S. companies (small caps), those with a market
value between $300 million and
$2 billion. The small cap index is
historically linked to increased volatility and returns relative to
mid- and large-cap indices. As volatility rises, so too does the
size of the premium that can be generated by writing a call option.
RYLD presents a single solution for investors looking to
incorporate a small cap covered call strategy, who may otherwise
need to accept significant time and expense to operate this
strategy individually.
"Small caps can have higher volatility, which typically leads to
greater option premiums," said Rohan
Reddy, Research Analyst at Global X. "We are thrilled to be
able to offer investors the opportunity to utilize a covered call
strategy on the premier small cap benchmark index, the Russell
2000. We believe RYLD is a great complement to our other covered
call offerings, as investors continue to look for alternative
sources of income."
RYLD is the third ETF in Global X's Covered Call suite of ETFs,
joining the Global X Nasdaq 100 Covered Call ETF (QYLD) and the
Global X S&P 500 Covered Call ETF (HSPX). The suite now totals
over $500 million in AUM as of
April 16, 2019.
ABOUT GLOBAL X
Global X was founded in 2008 with the mission of listening to
and empowering clients to invest wisely in unexplored and
intelligent solutions. Our product lineup features more than 60 ETF
strategies. While we are distinguished for our Thematic Growth,
Income and International Access ETFs, we also offer Core,
Commodity, Alpha and Risk Management funds to suit a wide range of
investment objectives. Global X is a member of Mirae Asset Global
Investments Group, a Seoul-based global enterprise which
offers asset management expertise worldwide. Explore our ETFs,
research and insights, and more at globalxfunds.com.
Investing involves risk, including the possible loss of
principal. Investments in smaller companies typically exhibit
higher volatility. Concentration in a particular industry or sector
will subject RYLD to loss due to adverse occurrences that may
affect that industry or sector. Investors in RYLD should be willing
to accept a high degree of volatility in the price of the fund's
shares and the possibility of significant losses.
RYLD 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, in
this case U.S. common equities, and writing a call option on that
same asset with the goal of realizing additional income from the
option premium. RYLD writes covered call index options on the
Russell 2000 Index. 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. Investment in the Fund is subject to the
risks of the underlying fund.
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 Funds' investment objectives, risk
factors, charges and expenses before investing. This and additional
information can be found in the Funds' full or summary prospectus,
which may be obtained by calling 1-888-GX-FUND-1 (1.888.493.8631),
or by visiting globalxfunds.com. 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. Global X Funds are not sponsored, endorsed, issued,
sold or promoted by FTSE Russell or CBOE, nor do these entities
make any representations regarding the advisability of investing in
the Global X Funds. Neither SIDCO nor Global X are affiliated with
these entities.
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SOURCE Global X Funds