ProShares Russell 2000 High Income ETF

ITWO

Market cap $193M

Investors have plenty of reasons to celebrate the covered call ETF boom. Covered call strategies have offered new ways to add income to portfolios.

In a recent ProShares webcast, Global Investment Strategist Simeon Hyman and Director of Investment Strategy Kieran Kirwan zeroed in on a persistent frustration for income-focused investors: why traditional covered call strategies tend to fall behind when markets rebound.

Small-cap stocks have gained roughly 21% over the past year despite a choppy start to 2026.

ProShares Russell 2000 High Income ETF (ITWO) offers direct small-cap exposure paired with 0DTE covered calls to provide investors growth and income. ITWO outperformed peer covered call strategies over the past year, benefiting from its 0DTE approach and direct equity investment. Small-cap outperformance is expected in 2026 due to potential rate cuts, sector rotation, and industrials growth themes.

ProShares Russell 2000 High Income ETF is upgraded to a buy, reflecting improved outlook amid sector rotation and favorable small-cap dynamics. ITWO's daily 0DTE covered call strategy, direct equity ownership, and OTM options provide efficient income generation with lower risk than high-yielding peers. Dividend yield exceeds 11%, but payouts are variable and sensitive to market conditions, making ITWO best suited for opportunistic rather than income-dependent investors.

If you have a long-term focus and you also want high yields, it's a good idea to look into the ProShares Russell 2000 High Income ETF (BATS:ITWO), iShares 20+ Year Treasury Bond BuyWrite Strat ETF (BATS:TLTW), and Westwood Salient Enhanced Midstream Income ETF (NYSE:MDST).

ProShares Russell 2000 High Income ETF earns a Buy rating for its agile, daily-reset covered call strategy suited to volatile, flat 2026 markets. ITWO's 1DTE structure efficiently captures short-dated premiums, balancing risk and upside better than monthly (RYLD) and overnight-exposed (RDTE) peers. ITWO delivers sustainable ~11% yields without NAV erosion, outperforming in choppy or correction-prone small-cap environments versus RDTE's higher but less durable payouts.

ProShares Russell 2000 High Income ETF (ITWO) offers amplified income via a covered call strategy but remains untested due to its short operating history. ITWO delivers a high 12.3% yield with monthly payouts, yet distributions are highly inconsistent and sensitive to market volatility and option-writing outcomes. The fund's capped upside from option writing limits long-term total return potential, making ITWO less suitable for growth-focused investors compared to traditional ETFs like IWM.

Are you looking to combine small-cap upside with income? With markets seeing increased volatility and large-caps looking expensive, marrying the two could boost portfolios.

BETHESDA, Md.--(BUSINESS WIRE)--ProShares launched the ProShares Russell 2000 High Income ETF (CBOE: ITWO).