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Barclays Bank PLC and the Chicago Board Options Exchange® (CBOE®) announced today the launch of the iPath(SM) CBOE S&P 500 BuyWrite Index Exchange Traded Note (ETN) on the American Stock Exchange under the ticker symbol BWV. It is the first iPath ETN to offer investors exposure to the CBOE S&P 500 BuyWrite Index (BXM)(SM), less applicable fees. The index tracks the total return of a hypothetical buy write, or covered call strategy, on the S&P 500® Index.
Historically, the CBOE S&P 500 BuyWrite Index has generated comparable returns to the S&P 500® Index but with two-thirds the risk. This strategy can help reduce volatility in an investor's stock portfolio by providing premium income from written call options that can, to a limited extent, offset losses from downside market performance in the equity portfolio on which the options are sold.
"The new iPath(SM) ETN assists investors in getting a simple, transparent, cost* and tax efficient** exposure to the CBOE S&P 500 BuyWrite Index," said Philippe El-Asmar, Managing Director and Head of Investor Solutions, Americas, at Barclays Capital.
"CBOE is pleased to see continued recognition of the CBOE S&P 500 BuyWrite Index, the first major benchmark for options-related performance, and the winner of the Most Innovative Benchmark Index distinction at the Super Bowl of Indexing conference," said Edward Provost, CBOE Executive Vice President, Business Development. "The BXM Index is a valuable tool for investors who wish to explore ways to provide incremental income that could potentially boost risk-adjusted returns and provide a cushion against downside losses."
The iPath(SM) CBOE S&P 500 BuyWrite Index ETN is a senior, unsecured, unsubordinated debt security linked to the performance of an index and issued by Barclays Bank PLC. iPath ETNs are designed to provide investors with convenient access to the returns of market benchmarks, less investor fees. Subject to requirements described in the applicable pricing supplement, the Securities may be redeemed weekly from the Issuer in large, institutional blocks (typically, 50,000 units).
The pricing supplements can be found on the SEC website at: http://www.sec.gov/Archives/edgar/data/312070/000119312507120898/d424b3.htm
Several Barclays companies worked together to create this success. Barclays Bank PLC is the issuer; Barclays Capital Inc. is the issuer's agent; and Barclays Global Investors Services (BGIS), an affiliate, assists in the promotion of iPath ETNs to intermediaries.
* iPath ETNS typically have lower investor fees than currently existing mutual funds that invest in similar markets and are available to retail investors. Buying and selling iPath ETNs will result in brokerage commissions.
** The sales redemption or maturity of the Securities will generate tax consequences. For a more complete description, please see the description of the US federal income tax treatment in the applicable pricing supplement at http://www.ipathetn.com/.
