HEQT vs PEPS

HEQTBSimplify Hedged Equity ETF

PEPSBParametric Equity Plus ETF

In short

HEQT Most S&P 500 options funds sell calls to pump out income. HEQT flips the priority: a put/spread collar aimed at softening drawdowns and volatility, with long-term appreciation as the stated goal. Distributions land quarterly.

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

HEQT The fund seeks long-term capital appreciation through primarily U.S. large-cap equity exposure, while using a put/spread collar option overlay intended to reduce downside risk and volatility.

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

• HEQT Hedge-first, not yield-first: the option overlay exists to reduce downside risk and volatility rather than maximize payouts.simplify.us
• Fee of 0.53% a year undercuts the median in its 51-fund S&P 500 options cohort, unusual for a strategy this hands-on.
• Lands in the upper half of that crowded cohort, with risk control the strongest part of the build.
• The reference point is the S&P 500 itself, so what sits under the options is familiar US large-cap equity.simplify.us

• 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

• HEQT A collar cuts both ways: the calls sold to help pay for the puts also trim participation in a strong rally.simplify.us
• Cheaper options-on-the-S&P builds exist in the same lane, including IVVW at 0.25% and PBP at 0.29%, though neither runs this collar.
• Trading is moderate rather than heavy, so spreads can run wider than the category's busiest names.

• 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 HEQT profile⁠

Full PEPS profile⁠