J Studios
By Christopher Gannatti, CFA
Investors in U.S. equities, judging by the performance of benchmark indexes, have been treated to a very strong run. The S&P 500 Index, as of this writing, is flirting with new highs.1
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Is It Time To Sell Volatility?
Summary
- With U.S. equity markets near record highs, option-writing strategies like the WisdomTree PutWrite Strategy Fund and the JPMorgan Equity Premium Income ETF offer a way to potentially hedge against rising volatility while generating income.
- PUTW's strategy of selling in-the-money put options on the S&P 500 Index targets higher premiums but increases sensitivity to equity market declines, while JEPI’s approach, selling out-of-the-money call options alongside active stock selection, is more defensive.
- Both strategies have delivered lower volatility and higher risk-adjusted returns than the S&P 500 Index, but each carries distinct risks tied to their exposure and income generation methods.
In 2006, WisdomTree launched with a big idea and an impressive mission — to create a better way to invest. We believed investors shouldn’t have to choose between cost efficiency and performance potential, so we developed the first family of ETFs designed to deliver both. Today, WisdomTree offers a leading product range that offers access to an unparalleled selection of unique and smart exposures.