At a glance
- Options-based ETFs hold close to $400 billion, with derivative income funds at $230 billion and about two-thirds of this year's flows, according to a Daily Network fund review.
- For fund selectors, Fidelity's FYEE fund shows the test: a 9.1% trailing yield against a 6-8% payout target and an equity beta of roughly 0.79 since inception, according to portfolio manager Eric Granat.
- For issuers and selectors, the relevant question is which contracts a fund actually uses and whether its distribution depends on that segment staying liquid.
Cboe reported third-quarter options average daily volume of 70.6 million contracts, 4% below the second-quarter record, while growth was concentrated in index and ETF options.
Options-based ETFs hold close to $400 billion, with derivative income funds at $230 billion and about two-thirds of this year's flows, according to a Daily Network fund review. The category spans more than 1,000 funds, so a large product shelf is tied to an options market whose total volume fell even as index and ETF options grew.
For fund selectors, Fidelity's FYEE fund shows the test: a 9.1% trailing yield against a 6-8% payout target and an equity beta of roughly 0.79 since inception, according to portfolio manager Eric Granat. A selector can use that gap to ask how much equity risk sits behind the income.
For issuers and selectors, the relevant question is which contracts a fund actually uses and whether its distribution depends on that segment staying liquid. The next Cboe quarterly review will show whether the split persisted.
Reported by The Tape desk from Cboe quarterly review, Fidelity FYEE commentary via Eric Granat and ETF Daily tracking. Published . Corrections
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