Derivatives

Lets assume you don’t want to trade stock options or don’t have time to do it or are unwilling to learn something new. That doesn’t mean you have to leave money on the table. Someone else can do it for you, for a price. For example, you could buy shares of “Goldman Sachs S&P 500 Premium Income ETF.” What is this investment?

GPIX  Goldman Sachs S&P 500 Premium Income ETF

The fund profile says this: “Goldman Sachs ETF Trust – Goldman Sachs S&P 500 Premium Income ETF is an exchange traded fund launched and managed by Goldman Sachs Asset Management, L.P. The fund invests in public equity markets. It invests directly and through derivatives in stocks of companies operating across diversified sectors. It uses derivatives such as options to create its portfolio. The fund invests in value and growth stocks of companies across diversified market capitalization. The fund seeks to benchmark the performance of its portfolio against the S&P 500 Index.”

Key Dividend Metrics for GPIX

GPIX has a rational expense ratio of 0.29%. While this is higher than my preferred limit of 0.10%, it isn’t bad considering the work the fund manager does. The dividend frequency is monthly, which is nice. Furthermore, the current yield (TTM) is 8.03%.

Isn’t this risky? Every investment involves risk. You cannot avoid it, but you can make decisions that balance risk with better rewards. Remember that total returns matter, not just price returns.

Full Disclosure and a Suggestion

We own shares of the ETFs in the blue box of this image. I would suggest you consider buying shares of JEPQ and GPIX.

Today’s Cover Picture: Wayne in the Pacific Ocean

The picture was generated using AI using an image from our trip to Costa Rica with our granddaughter Noelle. ChatGPT is a fun tool. I told ChatGPT this: “Create a picture of Wayne evaluating the risk of JEPQ and GPIX. Both of these are ETFs that trade Derivatives for income.”

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