CI Global Asset Management Launches Multi-Sector and Fixed-Income Covered Call Strategies

TORONTO (August 6, 2024) – CI Global Asset Management (“CI GAM”) announces the launch of new covered call mandates – a multi-sector mutual fund and a U.S. fixed-income strategy available in both mutual fund and ETF structures. The three funds are the latest additions to CI GAM’s extensive covered call lineup.

The new funds are CI Multi-Sector Covered Call Fund, CI U.S. Aggregate Bond Covered Call Fund and CI U.S. Aggregate Bond Covered Call ETF. The ETF has now closed its initial offering of Hedged Common Units, which begin trading today on the Toronto Stock Exchange under the ticker CCBD.

“We’re pleased to add these compelling new options to our covered call lineup, which now consists of eight ETFs and six mutual funds,” said Jennifer Sinopoli, Executive Vice-President and Head of Distribution for CI GAM.

“Covered call strategies are an attractive option in today’s climate because they offer a tax-efficient income stream and a degree of downside protection while maintaining targeted exposure to the underlying asset class. Investors also benefit from CI GAM’s systematic approach and the deep experience of our investment team in managing covered call strategies.”

CI GAM’s approach is to sell call options on approximately 25% of the portfolio on a monthly basis, which generates income while ensuring that at least 75% of the portfolio remains invested.

CI Multi-Sector Covered Call Fund

CI Multi-Sector Covered Call Fund marries the covered call strategy to a broadly diversified portfolio of North American equities. It invests in CI GAM’s lineup of seven sector equity-based covered call ETFs, which provide exposure to the financial services, technology, health care, utilities, energy and materials sectors. The fund will maintain a sector allocation that is largely representative of the North American equity market, rebalancing quarterly.

The covered call option strategy used by the underlying ETFs seeks to generate tax-effective income from dividends, distributions and call option premiums, provide the potential for capital appreciation, and reduce the volatility associated with owning the underlying equity securities.

CI U.S. Aggregate Bond Covered Call ETF (“CCBD”) and CI U.S. Aggregate Bond Covered Call Fund

CCBD invests in U.S. government bond and high-quality U.S. corporate bond ETFs in a mix designed to represent the aggregate U.S. bond market. CCBD will rebalance its holdings quarterly. The covered call option strategy used by CCBD seeks to earn an attractive yield from interest income, distributions and call option premiums, to lower the overall volatility of returns associated with owning this portfolio of bonds, and to generate capital appreciation.

CI U.S. Aggregate Bond Covered Call Fund invests all or substantially all of its assets in CCBD, which has the same portfolio advisor and investment objectives as CI U.S. Aggregate Bond Covered Call Fund.

More information about CI GAM’s covered call ETF lineup is available here.

A covered call option strategy is implemented by selling a call option contract while owning an equivalent number of the underlying securities. The option premiums provide additional income, which is considered tax efficient because the premiums are taxed as capital gains rather than interest income. However, when prices of the underlying securities are rising, the upside gains are limited because the buyers of the call options will exercise their right to purchase the underlying securities.

About CI Global Asset Management

CI Global Asset Management is one of Canada’s largest investment management companies. It offers a wide range of investment products and services and is on the web at www.ci.com. CI Global Asset Management is a subsidiary of CI Financial Corp. (TSX: CIX), an integrated global asset and wealth management company with approximately $489.1 billion in assets as of June 30, 2024.