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Buy-Write ETF (PBP) Hits New 52-Week High

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For investors seeking momentum, PowerShares S&P 500 BuyWrite Portfolio (PBP - Free Report) is probably on radar now. The fund just hit a 52-week high and is up about 15.7% from its 52-week low price of $18.85/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

PBP in Focus

This fund seeks to track the CBOE S&P 500 BuyWrite Index, which employs the hypothetical buy-write strategy on the S&P 500 Index. This strategy includes holding a long position in the stocks on the S&P 500 and selling a succession of covered call options, each with an exercise price at or above the prevailing price level of the S&P 500 Index. The fund has $283.2 million in AUM and charges 75 bps in annual fees (see: all the Large Cap ETFs here).

Why the Move?

This corner of the broad U.S. stock market has been an area to watch lately given the bouts of volatility and heightened uncertainty. Trump’s protectionist and anti-trade policies have sparked concerns over global trade, economic growth and political stability. Against such a backdrop, investors are looking for capital appreciation opportunities in the equity world with simultaneous downside protection, making a ‘Buy-Write’ strategy a compelling option for now.

More Gains Ahead?

It seems that PBP might remain strong given a high weighted alpha of 11.50% and a low 20-day volatility of 3.57%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.

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