BNP AM

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US Premium Income is an alternative way to generate income: systematic put-writing on a selection of single stocks

Investment Theme

Liquid Alternatives / Income

Asset class

Equities

Style

Income

Objective:

The THEAM Quant – Equity US Premium Income Fund seeks to provide income and capital growth by implementing a systematic option strategy on a selection of US equities which aims at generating income in bullish and moderately bearish markets. The Sub-Fund targets an income of 5% per year.

In order to achieve its investment objective, the Sub-Fund implements a quantitative investment strategy (the Strategy) which consists in selling short-term put options on a selection of US equities through the BNP Paribas Stock Put Write US Index (the Strategy Index).

Key points:

  • Firstly, Every month, the Strategy selects equities on the basis of fundamental and market criteria.
  • Moreover, the objective is to identify the large-cap, liquid US stocks benefiting from a sustainable business model, favourable price momentum, low correlation to US equities, attractive valuation of option premium, and favourable trading conditions on the option market.
  • In addition, once the stocks have been identified, the strategy dynamically sells short-term out-of-the-money put options on each of the selected equities, in equal proportions.
  • At last, THEAM has combined its recognised expertise in both stock-picking strategies (THEAM Quant Equity GURU® funds live since 2009) and option-writing (THEAM Quant Equity Covered funds live since 2006) to create this innovative solution. 
    Investments in the aforementioned strategies are subject to market fluctuation and risks inherent in investing in securities. The value of investments and the revenue they generate can increase or decrease and it is possible that investors will not recover their initial investment. Source: BNP Paribas Asset Management Holding, registered with the Paris Registry of Commerce and Companies under number 682 001 904 as a Limited Company with share capital of 23 041 936 euros. Registered office: 1 Boulevard Haussmann, 75009 Paris. Postal address: TSA 47000/75318 PARIS CEDEX 09