For investors seeking momentum, Invesco S&P 500 BuyWrite ETF PBP is probably on the radar. The fund just hit a 52-week high and is up 18.6% from its 52-week low price of $18.56/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
PBP in Focus
Invesco S&P 500 BuyWrite ETF is based on the CBOE S&P 500 BuyWrite Index. The Index measures the total rate of return of an S&P 500-covered call strategy. This strategy consists of holding a long position indexed to the S&P 500 Index and selling a succession of covered call options, each with an exercise price at or above the prevailing price level of the S&P 500 Index.PBP charges 49 bps in annual fees (see: all the Large Cap Blend ETFs here).
Why the Move?
This corner of the broad U.S. stock market has been an area to watch lately. A buy-write, also known as a covered call strategy, is an investment strategy used to generate income and potentially hedge against downside risk. It involves buying a stock or a basket of stocks and then selling or writing call options on those assets.
More Gains Ahead?
It seems that PBP might remain strong given a weighted alpha of 7.40 and a low 20-day volatility of 7.05%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.
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