In focus

The Road Less Traveled: Finding income in equities

Historically, most institutions who have considered overwriting strategies have favored approaches that sell broad-based equity index options (e.g. S&P 500 Index options) as an overlay to their underlying equity portfolio. We believe the recent uptick in retail activity in the single-stock options market, coupled with the higher idiosyncratic volatility and option premiums of individual stocks, are particularly supportive of a more dynamic and flexible approach that can identify relative-value opportunities across individual companies instead. We refer to these single-stock option overwriting approaches as “Enhanced Equity Income” strategies.

Read the full report

0 pages | 394 kb


The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.