The underlying index for the Horizons S&P 500 Covered Call ETF is changing from the S&P 500 Stock Covered Call Index to the CBOE S&P 500 2% OTM BuyWrite Index (BXY Index).
Additionally, the Fund’s investment objective will also change from seeking investment results that, before fees and expenses, generally correspond to the performance of the S&P 500 Stock Covered Call Index to seeking investment results that, before fees and expenses, generally correspond to the performance of the CBOE S&P 500 2% OTM BuyWrite Index (BXY Index).
“The primary rationale behind the conversion in the underlying index is to enhance the tax efficiency of the covered call strategy. We view the blend of long and short term tax treatment on income derived from writing index options as more favourable than purely short term capital gains associated with single stock options. This transformation in the strategy should both benefit our investors and align HSPX with our other options’ strategies; which utilise index options in the pursuit of tax efficient income,” says Jonathan Molchan, Head of Product Development & Portfolio Manager at Horizons ETFs (US).
