CI GAM launches innovative multi-sector and US bond covered call funds, enhancing income options
CI Global Asset Management (CI GAM) has launched new covered call mandates, introducing a multi-sector mutual fund and a US fixed-income strategy available as both mutual funds and ETFs.
These additions expand CI GAM’s covered call offerings, which now include eight ETFs and six mutual funds.
The new funds are CI Multi-Sector Covered Call Fund, CI US Aggregate Bond Covered Call Fund, and CI US Aggregate Bond Covered Call ETF. The ETF has closed its initial offering of Hedged Common Units, trading today on the Toronto Stock Exchange under the ticker CCBD.
“We’re pleased to add these compelling new options to our covered call lineup,” said Jennifer Sinopoli, executive vice-president, and head of Distribution for CI GAM.
“Covered call strategies are an attractive option in today’s climate because they offer a tax-efficient income stream and a degree of downside protection while maintaining targeted exposure to the underlying asset class. Investors also benefit from CI GAM’s systematic approach and the deep experience of our investment team in managing covered call strategies.”
CI GAM’s approach involves selling call options on approximately 25 percent of the portfolio monthly, generating income while keeping at least 75 percent of the portfolio invested.
CI Multi-Sector Covered Call Fund combines a covered call strategy with a diversified portfolio of North American equities. It invests in CI GAM’s sector equity-based covered call ETFs, covering financial services, technology, health care, utilities, energy, and materials sectors.
The fund maintains a sector allocation representative of the North American equity market, rebalancing quarterly.
The covered call strategy of the underlying ETFs aims to generate tax-effective income from dividends, distributions, and call option premiums, provide potential capital appreciation, and reduce the volatility associated with owning the underlying equity securities.
CI US Aggregate Bond Covered Call ETF (CCBD) and CI US Aggregate Bond Covered Call Fund
CCBD invests in US government bonds and high-quality US corporate bond ETFs, representing the aggregate US bond market, rebalancing quarterly.
The covered call strategy of CCBD aims to earn an attractive yield from interest income, distributions, and call option premiums, reduce return volatility, and generate capital appreciation.
CI US Aggregate Bond Covered Call Fund invests substantially all its assets in CCBD, sharing the same portfolio advisor and investment objectives.
