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Alternative investment manager Ninepoint Partners has launched a new ETF in Canada that aims to deliver a high level of monthly income by continuously selling equity put options.

Etienne Bordeleau-Labrecque, Vice President and Portfolio Manager at Ninepoint Partners.

The Ninepoint Target Income Fund (TIF CN) has been listed on NEO Exchange with a management fee of 0.60%.

The actively managed fund is overseen by Etienne Bordeleau-Labrecque, Vice President and Portfolio Manager at Ninepoint Partners, who is supported by RBC Capital Markets’ expertise in derivatives.

The strategy targets a stable monthly distribution yield of 6% at launch while maintaining lower volatility than a direct investment in global equity markets.

It aims to achieve this by receiving the ‘insurance premiums’ associated with regularly selling puts on multiple broad-based global equity indices. New puts are continuously sold on a quarterly basis.

By diversifying across indices, strike prices, and option maturity dates, as well as incorporating an active risk management overlay, the ETF aims to provide somewhat of a buffer against downside risk.