Global X sees structured ETFs broadening reach of options-based strategies

Global X is extending its ETF offering across income-oriented, thematic and risk-managed strategies, reflecting growing demand for investment solutions that combine options-based exposures with the accessibility of an exchange-traded wrapper.

If you’re thinking about application through a passive lens, we’re able to take a structured approach and make it repeatable - Rob Scrudato

Recent launches include a Hang Seng High Dividend income ETF combining Hong Kong equities with a call option strategy, a gold covered call ETF and an ETF tracking the Adaptive Wealth Risk Managed Yield Index, which uses a signal-based approach to shift exposures systematically.

The provider has also expanded its commodities range and introduced a tokenised unit class for its China Enterprises Index Covered Call Active ETF in Hong Kong. The developments come as options-based ETFs attract greater attention from investors seeking income and alternative portfolio construction strategies.

For Rob Scrudato (pictured) at Global X, the evolution of structured ETFs is closely linked to the growing role of custom and strategy indices, which can help make derivatives-based investment approaches more accessible and repeatable.

“If you’re thinking about application through a passive lens, we’re able to take a structured approach and make it repeatable and virtually perpetual, while at the same time increasing accessibility,” said Scrudato.

However, he notes that the majority of strategies in the market remain active. Custom indices can still play an important role in helping investors understand how those strategies work and the trade-offs embedded in their options packages.

They can also provide a framework for communicating the rules that may guide a broader active investment approach.

From bespoke notes to ETFs

The growing use of indices across structured notes, indexed annuities and ETFs reflects a broader expansion in the investor base for derivatives-based strategies.

Buffer ETFs are one example of products attracting increased interest, according to Scrudato. While these funds are often highly systematic, custom indices can help illustrate how their payoff structures might perform across different market cycles.

The ability to license an index across multiple issuers and wrappers also creates scope to scale a strategy beyond its original application.

“Many of these indexes operate with strict rules-based structures that seek to rebalance with known schedules, reconstitute with good transparency and conduct operations under calculable methodologies so they can be easily replicated and hedged,” he said.

These characteristics can make an index suitable for use across different investment vehicles, while helping investors and advisers understand the strategy's mechanics.

Nevertheless, Scrudato does not see ETFs replacing bespoke structured notes.

ETFs offer scalability and accessibility, but structured notes retain the ability to accommodate highly specific investor requirements, including individual strikes, credit exposures, protection contingencies and tailored terms.

In the autocallable market, some strategies are beginning to find their way into ETF structures, although the full flexibility of bespoke notes has yet to be replicated in the ETF space.

“An individual investor may want to establish highly unique or specific terms, strikes, credit exposures, or even protection contingencies, and this is where ETFs and structured notes can live together as harmonious tools,” said Scrudato.

Shared index architecture

The use of indices across different product wrappers is also bringing greater consistency to the language and design principles used by banks, insurers and ETF providers.

Terms such as buffer, cap and floor have become commonplace across the market, while established indices are increasingly being adopted by different issuing bodies. 

Scrudato points to decrement indices used in autocallable ETFs as a prominent example of this development, although he cautions that the incentives of insurers, banks and ETF issuers can still differ.

Transparency and rules-based methodologies have become increasingly important as structured ETFs attract investors who may be less familiar with options strategies.

These features can help make complex strategies more understandable by setting out their expected behaviour and potential outcomes, providing financial advisers with a clearer framework for evaluating them.

“They’ve helped take strategies that might have formerly been considered a ‘black box’ and turned them into easily digestible allocations with outcomes that retail investors can often grasp,” said Scrudato.

He adds that clear methodologies can help advisers assess how a strategy is expected to operate without having to rely too heavily on historical performance.

New avenues for innovation

Scrudat0 sees further opportunities for innovation as the derivatives market deepens and strategies that were previously difficult to implement become more systematic.

Global X has already applied covered call strategies to assets such as bitcoin and introduced shorter-dated weekly call options within some of its Income Edge strategies.

Multi-asset indices could also become more prominent as methodologies become increasingly granular, while structured product- and QIS-driven ETFs using swap contracts could provide investors with access to more complex strategies.

Artificial intelligence and data analytics may further accelerate index development by allowing product providers to respond more quickly to market dynamics.

Scrudato identifies volatility responses, real-time strategy monitoring and more dynamic stress testing as potential applications, alongside the use of alternative data to identify investment and hedging opportunities.

Prediction market data is another area being explored by ETF issuers as they assess the potential to develop investable strategies.

Understanding the outcome period

Despite the growing accessibility of structured ETFs, Scrudato said investors and advisers still need to understand how their payoff mechanics affect performance.

One misconception is that an exchange-traded product should consistently replicate the performance of its underlying asset whenever an option strike has not been breached.

The reality is more nuanced, particularly for strategies with defined outcome periods, where time value can materially affect the return trajectory.

“Convexity is a fairly straightforward mechanism to communicate and digest, but it is vital to communicate the return structure of these strategies within the confines of an outcome period,” he said.

Time value can have a meaningful impact on an investment's performance, particularly at the beginning of an outcome period.

For Scrudato, clear communication of those mechanics remains important as structured ETFs bring options-based strategies to a wider investor base.

This Q&A is published in full as a preview of the SRP Custom & Strategy Report 2026, which includes selected extracts from the interview.

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