Amplify ETFs is doubling down on income-focused innovation with the launch of two new fixed income funds that blend bond exposure with options strategies.
The Amplify LQD Investment Grade 12% Target Income ETF (BATS:LQDM) and the Amplify HYG High Yield 10% Target Income ETF (BATS:HYGM), both designed to deliver elevated income by pairing corporate bonds with systematic weekly covered calls.
The funds target annualized income of 12% and 10%, respectively, combining traditional bond interest with option premium generation in a bid to enhance yield in a still-demanding income environment.
The new ETFs expand Amplify's YieldSmart suite and build on its existing options-based fixed income lineup, including the Amplify TLT U.S. Treasury 12% Option Income ETF (BATS:TLTP).
CEO Christian Magoon framed the launch as part of a broader evolution in fixed-income investing, in which traditional bond strategies alone may not meet investors’ income expectations.
ETF Key Features
- Target income: LQDM aims for 12% annualized income; HYGM targets 10%
- Core exposure: Investment-grade corporate bonds (LQDM) and high-yield bonds (HYGM)
- Strategy: Systematic weekly covered call writing on bond holdings
- Income sources: Combination of bond interest and options premium
- Distribution: Monthly payouts
- Expense ratios: 0.54% for LQDM and 0.79% for HYGM
Both funds track Bloomberg-covered call bond indices and offer single-ticker access to diversified credit exposure with an income overlay—essentially turning plain-vanilla bonds into something a bit more "financially caffeinated."
By incorporating short-dated weekly options, LQDM and HYGM aim to generate more frequent premium income while maintaining exposure to investment-grade and high-yield corporate bonds.
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