Q: Hello Team,
Could I have your opinion on ZPH please. How safe is it going forward?
Thanks,
Could I have your opinion on ZPH please. How safe is it going forward?
Thanks,
5i Research Answer:
ZPH is still quite small currently, and we would prefer to see it at at least $50M before getting behind it ($31M now). We have no issues with its strategy or holdings. Indicated yield is 10.16% and YTD return 4.77%. In a Put Write ETF, put options are sold for income. If a stock held declines, the ETF has to buy that stock, but its cost base is lower because of the put option premium received. If the stock rises, or stays flat, the ETF just keeps the option premium when it expires. Fees are 0.73%, on the high side, but it is an active strategy. We would consider it decent. It is 100% exposed to equities so will have associated market risk. But we are comfortable with its strategy and sector exposure.