PEPS vs PHEQ

PEPSBParametric Equity Plus ETF

PHEQAParametric Hedged Equity ETF

In short

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.

PHEQ A hedged large-cap core that skips the outcome calendar. Parametric layers a ladder of put spreads and short calls over U.S. stocks, so the hedge rolls through the year instead of resetting on one annual date.

Stated mandate

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.

PHEQ Seeks capital appreciation up to a cap while limiting investor losses through a downside buffer. It invests in U.S. large-cap equities and uses laddered put spreads and short calls to create buffer-cap structures.

Why people hold it

• 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.

• PHEQ 0.29% a year, roughly half the typical fee in its S&P 500 options crowd. Cheap for a strategy that usually charges up for the options desk.
• The ladder is the point: overlapping put spreads and short calls mature on a rolling basis, so no single reset date dictates your cap or your protection.eatonvance.com
• You own the stocks. It holds U.S. large caps outright and layers options on top, rather than renting exposure through swaps or a Treasuries-plus-calls package.
• Live since 2023 and one of the stronger builds in a crowded field of S&P 500 option-overlay funds, on our review.

Worth knowing

• 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.

• PHEQ A put spread covers a band, not the whole drop. Below the lower strike, losses track the market again, and the short calls trim the top end of big rallies.
• Thinly traded compared with the giants of this category, so bid-ask spreads can be wider and limit orders carry more weight.
• Built as a hedge, not a yield engine: income is paid quarterly and the fund declares no target payout rate.

Full PEPS profile⁠

Full PHEQ profile⁠