Amplify ETFs Launches TLTP: A High-Income Treasury ETF Aiming for 12% Annual Returns
Amplify ETFs has entered the high-yield ETF market with the launch of the Amplify Bloomberg U.S. Treasury Target High Income ETF (TLTP). This innovative ETF seeks to deliver an ambitious 12% annual income target, attracting investors who prioritize consistent returns over the roller-coaster ride of the broader equities market.
Adding Punch to Traditional Treasury Returns
TLTP, a collaborative effort between Amplify ETFs, Samsung Asset Management, and Bloomberg, is designed to boost traditional Treasury returns with a high-income, options-based strategy. The ETF employs a weekly covered call strategy on long-dated U.S. Treasuries, aiming to generate income beyond what Treasuries typically offer while maintaining the stability and security associated with government-backed bonds.
Christian Magoon, CEO of Amplify ETFs, emphasizes the appeal of TLTP, stating, “This ETF offers a multi-use solution for consistent high-income potential and a defensive position.” He highlights the fund’s ability to provide income while offering a hedge against potential market volatility.
TLTP’s Compelling Edge Over QYLD
TLTP joins a competitive landscape, facing off against the well-established Global X NASDAQ 100 Covered Call ETF (QYLD), which boasts $8.16 billion in assets and a respectable 11.77% yield. However, QYLD’s dependence on the tech-heavy NASDAQ 100 exposes it to greater volatility, making it a more growth-centric option.
TLTP positions itself as a less turbulent alternative, focusing on U.S. Treasuries to generate its 12% income target. The fund aims to provide a steady monthly payout, making it attractive for investors seeking a reliable income stream with a more conservative investment strategy.
Yield Boost For The Risk Averse?
TLTP’s 12% income target is a bold claim in the relatively tame world of fixed income. If the ETF successfully delivers consistent, high income, it could quickly become a favorite among risk-averse investors seeking a yield boost without taking on significant risk. Only time will tell if TLTP can match the success of QYLD, but with the backing of Samsung Asset Management’s experienced team, it has a strong foundation for success.
Investing in TLTP:
Investors interested in exploring TLTP should consult with a financial advisor to determine if it aligns with their investment goals and risk tolerance. It’s important to understand the risks and potential rewards associated with any ETF, especially those employing options strategies. While TLTP aims to provide a stable income stream, it’s essential to conduct thorough research and consider all factors before investing.
