Trevor Williams Thesis The Eaton Vance Tax-Managed Buy-Write Opportunities Fund ( NYSE: ETV ) is one of our core holdings, and we covered the name last about a year ago with a 'Hold' rating: Prior Rating (Author) 2023 was a difficult year for the fund due to its structure, with the name lagging the S&P 500 performance given the covered calls tenor set-up, and the sudden increases in equity prices rather than a smooth ride up. In this article we are going to revisit the name in light of the 2024 macro picture, and highlight why we believe the name is an appropriate fund to utilize in order to obtain equity exposure and extract dividends. Back to having a similar performance to the S&P 500 This year has been a much better one for the fund, with the smooth market 'grind-up' being closely matched by the CEF: Data by YCharts Year to date, the CEF is up 9.
4% on a total return basis, while the S&P 500 is up 11.7%. Buy-write CEFs do best when the market moves up in a smooth fashion, with small weekly gains.
In this layout the CEF obtains most of its benefit from its written call options, and is thus able to closely match the S&P 500 performance. ETV, just like the other buy-write names, will still be negatively affected by the very low VIX environment currently prevailing, macro set-up which results in lower than normal option premiums to be had. The Discount to NAV is historically wide ETV usually trades at a slight premium to NAV of 5% on average: Data by YCharts Due to its poor pe.