PEPS vs ZHDG

PEPSBParametric Equity Plus ETF

ZHDGDZega Buy & Hedge 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.

ZHDG Most S&P 500 options funds sell calls for income. ZHDG buys them: laddered long calls plus income assets and protective puts, aiming to hold equity-sleeve losses near 8-10% over any 12 months. Costs 0.95%.

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.

ZHDG The Fund seeks long-term capital appreciation while mitigating overall market risk.

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.

• ZHDG Builds S&P 500 exposure from long calls and income-producing assets, with put options for protection, targeting 100% notional market exposure without owning the stocks.sec.gov
• The ladder spans at least two expiration rungs across a rolling 12 months, so hedges roll continuously instead of resetting on one fixed annual date like buffer funds.sec.gov
• Upside comes from owning options rather than writing them, so this is not the premium-selling engine behind most funds in the S&P 500 options-income group. Running since 2021.sec.gov

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.

• ZHDG At 0.95% with no waiver, it sits above the category median; peers such as IVVW at 0.25% and GPIX at 0.29% (net of a waiver through April 30, 2027) run far cheaper.
• The hedge has a price: option time decay. The prospectus notes shorter-period losses can exceed the 8-10% target, and the fixed income sleeve can fall at the same time.sec.gov
• A small fund that can trade thinly, and it distributes annually or semiannually rather than monthly like much of the options-income category.

Full PEPS profile⁠

Full ZHDG profile⁠