WisdomTree Fund Gets A Makeover That's Built For Market Chaos

WisdomTree renamed its WisdomTree PutWrite Strategy Fund (PUTW) in an effort to more clearly articulate its income capabilities in today’s turbulent markets.

The fund, now known as WisdomTree Equity Premium Income Fund WTPI, has the same underlying strategy.

Launched on April 4, it trades with the net expense ratio at 0.44% and continues to follow the Volos U.S. Large Cap Target 2.5% PutWrite Index. It employs an options-based approach to generate stable income while shielding investors from downturns in the market.

WTPI is one of the more extensive product offerings in WisdomTree’s overall product universe, with around 80 ETFs across the U.S. and more than $80 billion in assets under management, according to Etftrends.com.

Also Read: From Boring To Booming: How Treasury ETFs Are Beating The Bear

Unlike conventional equity strategies, WTPI sells put options every other week on the SPDR S&P 500 ETF Trust SPY and invests the proceeds—along with other collateral—in U.S. 3-Month Treasury Bills. The fund aims for a 2.5% premium, harvesting the volatility premium embedded in the options market.

Previously following the CBOE S&P 500 PutWrite Index, PUTW was traditionally more appropriate for low-volatility or flat markets.

Moving to WTPI—and now its benchmark, the VULPW25 Index—represents a more sophisticated strategy designed to be more sensitive to equity market movement, hence a better income potential in volatile markets.

The name change also follows as investors seek more alternative sources of income with increasingly uncertain macroeconomic signals and limited upside in conventional equities.

The structure of the fund enables it to take advantage of increased implied volatility, which often results in premium options—a nice proposition when other sources of income are under siege.

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