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Goldman Sachs Premium Income ETF Lags S&P 500 on Rally Days
Goldman Sachs' Premium Income ETF (GPIX) has returned 21% over the past year, underperforming the SPDR S&P 500 ETF (SPY) which saw a 22% total return including dividends. The ETF's strategy of selling call options caps upside potential in strong market conditions, with part of its distributions potentially classified as return of capital, reducing cost basis and deferring taxes.
* If investing for current income, recognize that options strategies like those employed by Goldman Sachs' Premium Income can cap upside participation in strong markets. * Investors prioritizing tax deferral may consider the implications of return of capital distributions, which reduce cost basis and can increase future taxable gains.
