Innovator's Latest ETF Brings High-Yield Put-Writing To Retail Investors

Innovator Capital Management has launched the Innovator Equity Premium Income – Daily PutWrite ETF SPUT, providing a new twist to income generation within the ETF market. Most option-income ETFs are based on covered call strategies, but SPUT follows a different strategy by writing put options, which tend to yield higher premiums without limiting the upside potential of its equity investments.

Aside from option premiums, the fund also aims to earn income from stock dividends and U.S. T-Bills. Innovator intends to distribute the income to SPUT’s shareholders every month. The ETF has an expense ratio of 0.79%.

Innovator Capital provides over 150 ETFs and has more than $23 billion in assets under management.

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SPUT’s approach involves changing its put option strike price daily based on fluctuating market conditions. This adaptability is intended to maintain the risk of losses fairly low while maximizing income generation. The fund also invests close to half of its assets in large U.S. firms, following the Solactive GBS United States 500 Index.

"We regularly hear from clients who are looking for new ways to generate income in their portfolios, especially after the disappointing bond returns of recent years," said Graham Day, CIO at Innovator ETFs. "While the income from put-writing is compelling, we think the potentially low correlation to the bond market is another feature that will have strong appeal to investors."

Historically, the put-writing strategy employed in SPUT was only accessible to institutional and high-net-worth investors. With this introduction, Innovator is bringing it to a wider audience through the convenience of an ETF format.

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