GQI vs PEPS

GQIANatixis Gateway Quality Income ETF

PEPSBParametric Equity Plus ETF

In short

GQI Most S&P 500 income funds sell calls against the whole book. GQI writes options on half its equity, leaves the other half unencumbered, screens its stocks for quality, and pays monthly.

PEPS Active management at index-fund pricing. PEPS holds a U.S. large-cap base, then writes S&P 500 calls against offsetting long exposure: a beta-neutral overlay built to add return rather than swap upside for income.

Stated mandate

GQI The Fund seeks current income with capital-appreciation potential. It invests in diversified high-quality U.S. common stocks and uses an options-selling overlay on 50% of the equity portfolio to support monthly cash distributions, enhance return, and reduce downside risk.

PEPS The Fund seeks long-term capital appreciation. It is actively managed, using a U.S. large-cap equity base and beta-neutral call overwriting on the S&P 500 with offsetting long exposure to seek incremental total return.

Why people hold it

• GQI The options overlay covers 50% of the equity portfolio by design, so half the stock sleeve is never sitting under a call strike.
• At 0.34%, it undercuts the 0.60% median of its S&P 500 options-income cohort, and sits well below peers like SPYI (0.68%) and XYLD (0.60%).
• The equity side is a diversified basket of high-quality US common stocks, an advertised quality screen rather than a straight index clone.
• Cash goes out monthly, and the portfolio tracks the mandate in its prospectus closely. Rated in the top quartile of a 51-fund cohort of S&P 500 income strategies.

• PEPS 0.10% is index-fund pricing for an actively managed strategy. Even the cheap, well-regarded active peers cost more: DFAU at 0.12%, FELC at 0.18%.
• Not a covered-call fund. The sold S&P 500 calls are paired with offsetting long exposure, so the overlay seeks incremental total return instead of capping upside.
• Ordinary 1940 Act ETF wrapper, U.S. large-cap equity, distributions paid quarterly. The complexity lives in the overlay, not the tax paperwork.
• Cost is the standout: the typical active U.S. equity ETF in this group charges several times what PEPS does, and fee drag is the one input you know in advance.

Worth knowing

• GQI Written calls cap gains on the covered half. That is the trade: option premium now in exchange for giving up part of a strong rally.
• Shares are thinly traded, so the spread you pay getting in and out can matter more than the expense ratio.
• A 2023 launch with an asset base in the tens to low hundreds of millions, smaller and younger than the household names in this category.

• PEPS Launched in November 2024. The overlay has not yet run through a full market cycle, so there is limited history to judge it on.
• A small, thinly traded fund. Bid-ask spreads can run wider than a mega-cap index ETF's, which shows up most on larger orders.
• The options leg adds moving parts: short index calls lose value in a sharp rally, and the offsetting long exposure is what has to make that back.

Full GQI profile⁠

Full PEPS profile⁠