GPIX: Goldman Covered Call Fund Beating JEPI This Year

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Yagi Studio Thesis The Goldman Sachs S&P 500 Core Premium Income ETF (NASDAQ:GPIX) is an equity exchange-traded fund. The vehicle was launched in 2023 and represents an alternative to the widely ...

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The vehicle was launched in 2023 and represents an alternative to the widely ...</p>\n\n<a href=\"https://seekingalpha.com/article/4704266-gpix-goldman-covered-call-fund-beating-jepi-this-year\">Source Link</a>\n\n</div>\n","source":"seekingalpha_fund","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>GPIX: Goldman Covered Call Fund Beating JEPI This Year</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nGPIX: Goldman Covered Call Fund Beating JEPI This Year\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-07-16 19:14 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4704266-gpix-goldman-covered-call-fund-beating-jepi-this-year><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Yagi Studio Thesis The Goldman Sachs S&P 500 Core Premium Income ETF (NASDAQ:GPIX) is an equity exchange-traded fund. The vehicle was launched in 2023 and represents an alternative to the widely ...</p>\n\n<a href=\"https://seekingalpha.com/article/4704266-gpix-goldman-covered-call-fund-beating-jepi-this-year\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SPY","symbol_name":"标普500ETF","start_time":0,"source_url":"https://seekingalpha.com/article/4704266-gpix-goldman-covered-call-fund-beating-jepi-this-year","article_id":"2451995924","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1174370623/image_1174370623.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2451995924","pubTimestamp":1721128485,"sourceInfo":{"source_id":"seekingalpha_fund","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Yagi Studio Thesis The Goldman Sachs S&P 500 Core Premium Income ETF (NASDAQ:GPIX) is an equity exchange-traded fund. 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The vehicle was launched in 2023 and represents an alternative to the widely popular JPMorgan Equity Premium Income ETF (JEPI). Both funds take a covered call approach versus on outright position in the S&P 500.  In this article, we are going to have a closer look at GPIX, its composition and performance, the fund analytics, and our view on its forward. We are going to articulate why we favor GPIX over JEPI in the current macro set-up. The popularity of covered call funds explained In our view, covered call funds have exploded in the common consciousness via their ability to generate high dividend yields from the equity markets:   Options Based Funds (JP Morgan) Historically, equities are an asset class which experiences capital gains, and most retail investors have thought of equities as a means to invest for the long term. Covered call strategies have changed the game in that respect, although they have been prevalent in the closed end fund world for a very long time. Covered call strategies purely write calls on the held portfolios, thus generating dividend income. There are various ways to implement this strategy, and we prefer dynamic covered call funds rather than systematic ones. GPIX falls in the 'dynamic' category via its build: To generate income, the Fund employs a dynamic options “overwrite” strategy whereby the Fund sells (writes) call options on a varying percentage of the market value of the equity investments in the Fund’s portfolio. The overwrite level (i.e., the ratio of the notional value of call options sold by the Fund to the market value of the equity investments in the Fund’s portfolio) is generally revised each month and the Fund expects that, under normal circumstances, it will sell call options in an amount that is between 25% and 75% of the value of the equity investments in the Fund’s portfolio. We like dynamic overwrite strategies because they take into account market indicators such as volatility, over-bought or over-sold levels and other technical factors. Conversely, systematic strategies fail to decrease the overwritten ratio when markets are over-sold, or even by-pass writing calls when the volatility levels are too low. A dynamic strategy does indeed introduce a human element to the equation, but Goldman is a mint name that has produced outstanding results via its asset management division. Dynamic allocation versus static - JEPI has underperformed in 2024 Since its IPO, JEPI has grown into a behemoth, representing a market standard in the covered call space: Data by YCharts With notoriety and an AUM of over $30 billion come market distortions. Market participants keenly look for the roll dates associated with the fund in order to trade ahead of the name. GPIX is just getting started, and its dynamic approach in terms of its overwrite percentage has allowed it to outperform this year: Data by YCharts We are comparing GPIX to the S&P 500 and JEPI here, but also comping it against some golden standard CEFs in the space, namely the Eaton Vance Enhanced Equity Income Fund (EOI) and Eaton Vance Tax-Managed Buy-Write Opportunities Fund (ETV). While the CEF space has a long history of covered call funds, the CEF structure which allows for discounts to NAV is not as appealing to many retail investors. While GPIX has outperformed JEPI by a large margin in 2024, the fund unsurprisingly lags the S&P 500 by a small percentage. The covered call CEFs EOI and ETV have been the clear winners in 2024. We cover both those tickers (you can navigate to their respective pages on the Seeking Alpha platform to read our research on them). Bringing FLEX options into the covered call space is an advantage What sets GPIX apart, is its usage of FLEX options: The Fund may invest in FLexible EXchange Options (“FLEX Options”), other types of listed options and over-the-counter (“OTC”) options. FLEX Options are customized exchange-traded option contracts available through the Chicago Board Option Exchange. Through FLEX Options, the Fund could customize key contract terms such as exercise prices and expiration dates. FLEX options are European style options which are directly negotiated, rather than actively traded on an exchange. Given the purpose of a covered call fund, FLEX options offer better pricing than exchange ones, plus you do not see your transactions on the trading tape for others to front-run you. A covered call fund will wait until expiry date, so unlike private investors who might want to trade in and out of liquid options, covered call funds do not need that pricing flexibility embedded in exchange listed American style options. The current portfolio contains only FLEX options: Current Portfolio (Fund Website) We can see the fund currently running a ladder of very short-dated FLEX calls (all sub one month). Yield considerations Firstly, one has to remember that as a covered call fund, the vehicle is very much dependent on the S&P 500 performance. While many platforms are not showing the current yield for the name, we can back into it: Distribution History (Fund Website) The fund has seen a constant monthly distribution of roughly 0.3 per share. If we annualize that (0.3 x 12) and divide it by the current fund price of $48/share, we get a current yield of 7.5%. Given the outstanding performance for the index in 2024, we have seen the fund also post a higher NAV this year: Data by YCharts Long term, expect the fund to make most of its returns via its dividend distribution. In the years when the S&P 500 records outstanding performances (i.e. above 10%) an investor will have the added benefit from a higher NAV as well. As an investor, you will also own the full downside when the market moves lower, with the benefit of clipping options premiums. Risk factors An investor needs to understand there is no 'magic' here in deriving dividends from the equity markets. The fund does this via options, but a down market will result in the fund's NAV decreasing, albeit with a dampened approach given the premiums obtained on the written calls. GPIX is not a fixed income fund where the cash come from the interest obtained from bonds. GPIX's returns purely come from equities and their performance. If the S&P 500 has a down year, GPIX will be down on a total return basis as well. Conclusion  GPIX is a covered call fund from Goldman. The vehicle employs a dynamic approach to its overwritten portfolio percentage, an approach which we favor in the current macro set-up (versus a systematic call writing one). The ETF currently has a ladder of short-dated FLEX options, with a one-month maximum maturity date in the current portfolio. We like the fund for its ability to bring FLEX options into the covered call space, given the usual life-cycle of such a fund. GPIX has outperformed the market standard JEPI by a large margin in 2024 given its dynamic portfolio approach and the usage of FLEX options. Going forward, we prefer GPIX over JEPI in the ETF space, all while recognizing that the CEF space offers better, more time tested alternatives such as EOI or ETV.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2451995924"}