Global X Debuts Two ESG, Options-Based Funds

Global X, a company that offers exchange-traded funds (ETFs), has listed two Environmental, Social and Governance (ESG) options-based funds – the Global X S&P 500 ESG Covered Call ETF (XYLE) and the Global X Nasdaq 100 ESG Covered Call ETF (QYLE).

The funds are the first covered-call related ESG listings from the New York-based company, which invests in large-cap companies with positive ESG characteristics that are tracked by indexes that employ a screening process. The ETFs also aim to increase income potential and monetize volatility by following a covered call strategy that sells call options.

Rohan Reddy, Director of Research at Global X ETFs, noted that investors frequently turn to covered call strategies when facing economic uncertainty due to concerns of a market downturn or rising interest rates.

The demand for ESG investing is being driven by investor interest globally. PricewaterhouseCoopers estimates that by 2026 ESG investing assets could reach $33.9 trillion, representing over one-fifth of total assets under management.

The two ETFs provide investment results that correspond, before fees and expenses, to the Cboe S&P 500 ESG BuyWrite Index and the Nasdaq-100 ESG BuyWrite Index, respectively. The funds have expense ratios of 0.60%.