First Asset launches unhedged Tech Giants ETF share class

Sep 1st, 2017 | By | Category: Equities

ETF Strategy events are back! Please join us for breakfast briefings on Digital Assets & the Blockchain Economy on Thursday 2nd September 2021 (08:15-11:00) and Thematic Investing on Friday 3rd September 2021 (08:15-11:15) both at Yauatcha City, Broadgate Circle, London. Sponsors include First Trust, GHCO, MSCI, Rize ETF, VanEck and WisdomTree.


First Asset Investment Management has launched a new share class of the First Asset Tech Giants Covered Call ETF (Toronto: TXF) which will trade under the ticker code TXF.B.

First Asset launches unhedged Tech Giants ETF share class

TXF.B will not hedge its foreign currency exposures relative to the Canadian dollar.

The new class of units will leave foreign currency exposures unhedged, as opposed to the fund’s original share class, available since October 2011, which hedges exposure relative to the Canadian dollar.

The ETF provides exposure to some of the largest, most innovative companies which operate within the technology sector. In addition, the fund seeks to minimize volatility and generate enhanced income through an actively managed covered call writing strategy.

A covered call is an options strategy whereby an investor holds a long position in an asset and sells or “writes” call options on that same asset in an attempt to generate more income (the additional income from option premium) than the asset would otherwise provide on its own from dividends or other distributions.

Option-based strategies take advantage of the supply-demand imbalance that exists between investors looking to hedge their equity positions and the lower number of hedge providers. This allows the fund to harvest the volatility risk premium and generate income for investors while managing the downside risk.

The largest 25 issuers, measured by market capitalization, listed on a North American stock exchange are chosen for inclusion in the ETF on an equally weighted basis and are rebalanced quarterly. Distributions are paid quarterly and no more than 25% of the portfolio’s securities will have call options written upon them at any given time.

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