XFUNDS launched the XFUNDS Technology Income ETF (VGTX), combining U.S. technology exposure with options strategies intended to generate income. The actively managed exchange-traded fund invests primarily in U.S. technology companies and funds providing information technology sector exposure. Under normal market conditions, at least 80% of its assets will be invested in information technology companies, sector ETFs and options on those securities.
The fund seeks option premiums through call and put spreads, which combine purchases and sales of options at different exercise prices. It may also use short calls and cash-secured puts. Treasury bills, money market funds and other cash equivalents may provide liquidity or collateral. XFUNDS expects the portfolio to focus primarily on large-cap U.S. technology companies, with flexibility to invest in select smaller companies.