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Put/Write ETF Could Gain Steam as Investors Embrace Options ETFs

BY | ETF Database
05/23/2025 | 59 VIEWS
The newly revamped WisdomTree Equity Premium Income Fund (WTPI) could be a solid choice as income-hungry investors turn to options-based ETFs to source yield without interest rate risk.Previously known as the WisdomTree Putwrite Strategy Fund (PUTW), WTPI was updated last month. The ETF, which turned nine years old in February, follows the Volos US Large Cap Target 2.5% PutWrite Index and generates income by selling put options on the S&P 500 Index. That’s a departure from most options-based ETFs, which are covered call funds. But like competing covered call strategies, WTPI checks the income box as highlighted by a distribution of 11.42%. Importantly, WTPI isn’t just an income diversifier. It has the potential to capture more upside than a covered call ETF because writing puts is a bullish trade.WTPI Could Have Growth AheadIn recent years, options-based ETFs, particularly those with massive yields, have garnered cultlike followings among retail investors. WTPI doesn’t feature the 30%-50% yields found on some products in this category. But the fund has benefits of its own that are appealing to more restrained income investors. “More than half of respondents now hold options-based ETFs, reflecting strong and rising interest in strategies that generate income or manage volatility,” according to Trackinsight’s 2025 Global ETF Survey. Indicating WTPI could gain more traction among investors over the near term is that those queried by Trackinsight told it they allocate 10%-30% of their portfolios to income-generating assets. Additionally, 60% of those already using options-based ETFs plan to increase their exposure to those funds. As noted by the survey, options income ETFs trail dividend equity and fixed income funds regarding adoption among market participants. That’s not surprising. And that’s because stocks and bonds are default asset classes for many investors. But that also implies there’s a lengthy runway for growth for ETFs like WTPI, particularly  interest rates turn volatile.Excess YieldTranslation: WTPI provides yield in excess of most bond ETFs. And it does so without depending on the Federal Reserve cutting interest rates. That’s something that may or may not materialize over the near term. Likewise, options ETFs aren’t as vulnerable to credit downgrades as corporate or government bond funds. For ETFs such as WTPI, those advantages are pertinent at a time when half of investors are expected to increase allocations to income funds in the months ahead, according to Trackinsight. For more news, information, and analysis, visit the Modern Alpha Channel. This article was prepared as part of WisdomTree’s general paid sponsorship of VettaFi | ETF Trends. This specific content within and any opinions expressed therein belong solely to VettaFi and do not reflect the opinion or analysis of WisdomTree, its employees, or its affiliates. Content published on VettaFi | ETF Trends is provided for educational purposes only and should not be considered investment or tax advice. For investment or tax advice, please consult a financial professional.  WisdomTree is an independent company, unaffiliated with VettaFi | ETF Trends. WisdomTree has not been involved with the preparation of the content supplied by VettaFi | ETF Trends. It does not guarantee, or assume any responsibility for its content.

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