Invesco S&P 500 BuyWrite ETF

PBP

Market cap $299M

Invesco S&P 500 BuyWrite ETF offers a 10% yield by holding S&P 500 stocks and selling covered calls for income. PBP's historical performance shows significant underperformance versus the S&P 500 and other buy-write ETFs, with notable inflation-adjusted value decay. Despite its attractive current yield, PBP's distribution has been irregular, raising concerns for income-focused investors.

Invesco S&P 500 BuyWrite ETF, the first covered call ETF, offers a unique historical lens on the true risks of option-driven ETFs. Investors often underestimate the structural risks of covered call ETFs, mistaking past resilience for inherent safety. My experience with PBP highlights that these ETFs have not yet faced a prolonged, grinding market downturn.

Coming off stellar gains from last year, many entered 2025 expecting limited upside. But upside may be even more limited following the recent rebound in equities as the tariff rhetoric cools.

The Invesco S&P 500 BuyWrite ETF holds the stocks of the S&P 500 and sells short-term call options on the index to generate income. The current yield is attractive, but price history points to significant decay in inflation-adjusted value and distribution history shows an irregular and much lower yield. Several ETFs implementing similar strategies in the same universe have outperformed PBP over the last 2 years.