PEPS vs SPYT

PEPSBParametric Equity Plus ETF

SPYTCDefiance S&P 500 Target Income 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.

SPYT Most S&P 500 income funds sell a call and stop there. SPYT sells a daily call spread, buying a higher strike back, so above that upper strike it can track index gains again. Stated aim: a 20% annualized payout, paid monthly.

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.

SPYT The Fund primarily seeks current income and secondarily seeks exposure to the performance of the S&P 500 Index through an actively managed strategy that holds index-tracking ETFs and sells daily credit call spreads.

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.

• SPYT The spread is the whole idea: sell a call at or near the money, buy one at a higher strike, so above that upper strike the fund can participate in index gains again.defianceetfs.comdefianceetfs.com 2
• The income goal is written down, not implied: a 20% annual target paid monthly, and the fund has run the daily credit-spread strategy on its label since launching in 2024.defianceetfs.com
• The equity sleeve is plain vanilla: unaffiliated ETFs that track the S&P 500 do the index work, with the options overlay bolted on top rather than replacing the stocks.defianceetfs.com

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.

• SPYT Fee is 0.92%, above the typical S&P 500 income fund, and well above cheaper peers like IVVW at 0.25%, RSPA at 0.32% and GPIX at 0.35%.
• Distributions can include return of capital, which Defiance discloses. Return of capital hands back your own money and reduces NAV per share rather than adding to it.defianceetfs.com
• Writing near-the-money calls every day trades away index gains inside the spread band, so the payout and the S&P's move are pulling in opposite directions.defianceetfs.com

Full PEPS profile⁠

Full SPYT profile⁠