Mirae Asset’s Global X is preparing two covered-call ESG ETFs, recent regulatory filings show.
Late last month, the firm filed initial prospectuses for the Global X Nasdaq 100 ESG Covered Call and S&P 500 ESG Covered Call ETFs, both of which could potentially commence trading as soon as mid-February.
Those product developments add to the 100 ETFs the firm currently offers. But they are significant in that they are ESG versions of two of Global X’s biggest funds.
Further, there appear to be few, if any, ESG-themed covered-call open-end mutual funds or ETFs on the market. The covered-call strategy, also known as buy-write, is designed to dampen downside risk for fund investors, which is a selling point in volatile markets, though it also limits upside potential.
Global X’s Nasdaq 100 Covered Call ETF is its largest, at nearly $6.6bn in assets, while the S&P 500 Covered Call ETF is its fifth biggest, at about $2.1bn. Among all covered-call ETFs on the market, Global X’s Nasdaq 100 Covered Call ETF is the biggest, according to data from ETF.com. And over the past 30 days, both of those existing Global X funds were the market leaders in net flows, according to the site.
The forthcoming ESG version of the Nasdaq 100 ETF would invest at least 80% of its net assets in the Nasdaq 100 ESG BuyWrite Index. The ESG version of the S&P 500 ETF would follow the Cboe S&P 500 ESG BuyWrite Index.
Neither ETF had fees listed in the early prospectuses filed with the Securities and Exchange Commission. The portfolio managers for both ETFs would be Nam To, Wayne Xie, Kimberly Chan, Vanessa Yang and Sandy Lu, each of whom is a member of the portfolio management team of the Global X’s similarly named non-ESG covered-call ETFs.