#United States #New York #Treasury #Bloomberg #Covered Call

Bloomberg Expands Multi-Asset Offerings with New Index

On December 10, 2024, Bloomberg L.P. unveiled the Bloomberg U.S. Treasury 20+ Year 12% Premium Covered Call 2.0 Index. This new index marks a significant enhancement to Bloomberg’s suite of Multi-Asset Indices and covered call benchmarks, focusing primarily on generating consistent income from option premiums while maintaining strategic investments in long-term U.S. Treasury bonds.

The primary goal of this index is to achieve a theoretical yield of 12%. To accomplish this, it is designed to measure income accumulation through treasury holdings and weekly option premiums. By modifying traditional strategies, this index allows for a reduced sale of call options, potentially increasing returns in a volatile interest rate environment.

Emanuele Di Stefano, the Head of Index Product Development at Bloomberg Index Services Limited, elaborated on the index’s features. “Traditional covered call strategies often limit upside potential by fully selling monthly call options. However, this new index allows the sale of weekly options instead. This modification promotes a steady income stream and could enhance total returns amid fluctuating interest rates,” he stated.

Bloomberg's latest index has also been licensed by Amplify ETFs, wherein it serves as the underlying benchmark for the newly launched Amplify Bloomberg U.S. Treasury Target High Income ETF (CBOE TLTP). This forms part of Amplify's broader initiative to integrate Bloomberg indices into their investment products, following their recent collaboration utilizing a Bloomberg equity index.

The multi-asset benchmarks from Bloomberg are designed to provide comprehensive measures of market performance across different asset classes on a global scale. Each index blends multiple indices from various categories—including equities and fixed income—to create a robust investment tool for market participants.

Customers can access detailed information about the index, as well as its methodology, through the Bloomberg Terminal and Bloombergindices.com, ensuring transparency and ease of access.

About Bloomberg and Its Index Services

Bloomberg Index Services Limited is renowned for crafting leading indices across multiple asset classes. The firm employs an innovative approach to establish strategic benchmarks that cater to the evolving investment needs of its clients and partners. With a strong focus on delivering reliable data and sophisticated technologies for analytics and calculations, Bloomberg ensures that its indices contribute significantly to its customers’ strategies.

Bloomberg itself is a prominent name in the global financial arena, providing trusted data, news, and insights that foster transparency and efficiency in market transactions. The company’s technology and services are designed to support informed decision-making, making it a crucial resource for a wide range of financial professionals.

For more information about Bloomberg and its offerings, visit Bloomberg.com/company.