PEPS vs XYLG

PEPSBParametric Equity Plus ETF

XYLGAGlobal X S&P 500 Covered Call & Growth 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.

XYLG The covered call trade at half strength. XYLG holds the S&P 500 and writes calls on only about half the portfolio, so half the index's upside stays uncapped while the other half funds monthly income.

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.

XYLG The fund seeks to track the price and yield performance of the Cboe S&P 500 Half BuyWrite Index before fees and expenses. It buys S&P 500 stocks and sells corresponding call options on about half of the portfolio, combining option income with partial upside exposure.

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.

• XYLG Half-covered by design: calls cover roughly 50% of the book, leaving the rest of the S&P 500's climb uncapped. A middle setting between plain index exposure and a full buy-write.cboe.com
• 0.35% a year, below the 0.60% median for S&P 500 option-income funds and half the fee of Global X's fully covered sibling XYLD.
• Owns about 500 stocks, tracks the Cboe S&P 500 Half BuyWrite Index closely, and pays monthly. One of the stronger builds in a crowded S&P 500 income cohort.

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.

• XYLG Option income rides on volatility. Premiums (and the monthly payouts they fund) shrink when markets go quiet.cboe.com
• Half the portfolio is still capped. In a fast rally the written calls hand back part of that gain, and the premium is the only cushion on the way down.cboe.com
• Smaller and thinner-traded than the headline names in its group, so limit orders earn their keep.

Full PEPS profile⁠

Full XYLG profile⁠