SEPI: The Shelton Equity Premium Income ETF
Actively managed equity income exposure built around carefully selected U.S. stocks and covered calls on individual positions.
Why Invest in SEPI?
- Shelton’s deep expertise in call options trading and equity selection including our Morningstar 5-star (10-YR) Flagship Mutual Fund, EQTIX and Equity Income Separately Managed Account (SMA).1
- The options on individual stocks may enhance flexibility for SEPI to monetize volatility and capture potential upside of equities.
- Offers a large-cap blended equity portfolio while seeking to generate consistent cash flow through the sale of covered calls.2
1EQTIX received an Overall Morningstar Rating of 4 stars among 83 Derivative Income funds, based on risk-adjusted returns, as of 12/31/2025. The fund’s Morningstar three-,five-, ten-year ratings respectively, 3 stars, 4 stars, 5 stars among 83, 65, 37 funds. The ETF is not a mutual fund and may not achieve the same results.
2Cash flow is the money generated or available to distribute to shareholders.
Ticker
SEPI
Launch Date:
9/8/2025
Primary Exchange:
NYSE Arca
CUSIP:
78410K667
Net Assets:
$56.6M as of 12/31/2025
# of Holdings (view all holdins):
40-50
Total Expense Ratio:
0.54%
Objective
The Shelton Equity Premium Income ETF (the “Fund”) seeks to achieve a high level of income and capital appreciation (when consistent with high income) by investing primarily in income-producing U.S. equity securities.
Insights
Insights
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Covered Call ETF Survey: Key Findings
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Download the Full Survey Results
Distribution Rate & Yield
Data as of: January 31, 2026
| Distribution Frequency | Monthly | 30-Day SEC Yield** |
| Distribution Rate* | 0.72% | 0.45% |
* Distribution Rate is the current distribution over NAV per share. Distributions may include option premium, ordinary dividends, interest income, capital gains, and return of capital. The distribution on 01/31/2026 included an estimated return of capital of 98.27%. Distributions may coincide with a decline in NAV. Distribution levels may vary and no minimum distribution amount can be guaranteed. See Form 19a-1.
** 30-Day SEC Yield is a standard yield calculation developed by the Securities and Exchange Commission that allows for fairer comparisons among bond funds. It is based on the most recent month end. This figure reflects the income earned from dividends – excluding option income – during the period after deducting the Fund’s expenses for the period.
NAV & Market Price
Data as of: February 27, 2026
| Net Asset Value | $25.97 | Closing Price | $25.95 |
| Daily Change | $-0.09 | Daily Change | $-0.16 |
| % Daily Change | -0.35% | % Daily Change | -0.61% |
| 30-Day Median Bid/Ask Spread | 0.19% | Premium Discount | -0.07% |
| Premium Discount History | |||
Fund Holdings
Data as of: March 2, 2026
| TOP 10 HOLDINGS | |||
| Caterpillar Inc | 6.4% | Exxon Mobil Corp | 3.83% |
| Apple Inc | 5.32% | Broadcom Inc | 3.82% |
| Alphabet Inc | 4.89% | Goldman Sachs Group Inc/The | 3.7% |
| Johnson & Johnson | 4.13% | Meta Platforms Inc | 3.56% |
| NVIDIA Corp | 3.98% | Merck & Co Inc | 3.37% |
Fund holdings are subject to change at any time and should not be considered recommendations to buy or sell any security.
Premium/Discount
Data as of: March 2, 2026
Our values & principles
How the Shelton Equity Income ETF Can Benefit Your Clients?
Seeks to deliver capital appreciation and an enhanced cash flow through writing covered calls and/or selling cash secured puts on portfolio positions, thereby enhancing the distribution rates to shareholders.
Risk-aware equity selection with upside opportunity. Covered calls on individual stocks, not indexes or synthetic notes, offer sector diversification & strong risk/reward profiles.
Leverage Shelton’s nearly two decades of expertise in covered call strategies in an actively managed efficient ETF wrapper.
Why Advisors Use SEPI for Equity Income Exposure
A differentiated, actively managed ETF designed to combine equity exposure, covered calls on individual stocks, and cash flow potential.
Why clients consider SEPI
- Targets cash flow through option premiums and dividends
- Built with carefully selected U.S. equity positions
- Covered calls are written on individual stocks, not indexes
- Seeks lower volatility and reduced overall equity risk
How SEPI fits in portfolios
- Active ETF structure with professional options management
- Designed for investors who want to stay invested in equities
- Can complement traditional income and dividend allocations
Meet Experts
Meet the team behind SEPI
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Meet Experts
Meet the team behind SEPI
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Frequently Asked Questions About SEPI
What is SEPI?
SEPI is the Shelton Equity Premium Income ETF, an actively managed equity income ETF that invests primarily in a portfolio of large-cap stocks and uses an options-based strategy that seeks to generate cash flow.
For investors researching ETF options trading strategies, covered call ETFs, or equity income ETFs, SEPI is designed to combine equity exposure with an options overlay that may support distributions over time.
How does SEPI seek to generate cash flow?
SEPI seeks to generate cash flow primarily by writing covered call options on individual stocks held in the portfolio. The Fund may also generate cash flow from dividends and other sources that can contribute to distributions.
Distributions may include:
- Option premium
- Dividends
- Interest income
- Capital gains
- Return of capital
Because distributions can come from multiple sources, the character of distributions may vary over time.
What is a covered call ETF?
A covered call ETF is an exchange-traded fund that typically holds stocks and writes call options against some or all of those holdings. This type of options income strategy is commonly used by investors seeking current cash flow from equities.
SEPI uses a covered call approach on individual stocks rather than relying solely on broad index options.
How is SEPI different from other equity income ETFs?
SEPI is different from some equity income ETFs because it writes covered calls on individual portfolio holdings rather than using a uniform index-based overlay. This may provide the portfolio management team with more flexibility in how it monetizes volatility, manages option coverage, and adjusts positioning across holdings.
SEPI is also actively managed, which means the portfolio team can adjust stock selection and options positioning over time as market conditions change.
Why use options on individual stocks instead of index options?
Using options on individual stocks may offer greater flexibility than applying the same options strategy across an entire index. This approach can allow the team to evaluate volatility, income potential, and coverage decisions at the stock level.
For investors comparing ETF options trading approaches, this means SEPI can take a more tailored path to managing its equity and options exposure.
What does active management mean for SEPI?
SEPI is actively managed, which means the investment team makes ongoing decisions about portfolio construction, stock selection, and options positioning. The Fund does not follow a static or purely rules-based process.
This active approach allows the team to respond to changing market conditions and evaluate where equity exposure and options coverage may be most appropriate.
Is SEPI an options trading ETF?
SEPI is not an ETF for direct investor options trading. Investors buy and sell SEPI shares on an exchange like other ETFs. Inside the portfolio, however, the Fund uses an options-based income strategy by writing covered calls on individual stocks.
For investors looking for exposure to an ETF that uses options trading as part of portfolio management, SEPI may be relevant.
What type of investor may be interested in SEPI?
SEPI may be relevant for investors looking for:
- An actively managed equity income ETF
- A covered call ETF strategy
- Large-cap equity exposure
- An ETF that uses an options-based income approach
- A strategy that may support cash flow through option premium and dividends
Investors should consider their investment goals, risk tolerance, time horizon, and need for current income before investing.
What are the key risks and considerations?
SEPI is subject to market risk and may lose value. Like other options-based ETFs and equity income ETFs, it involves important trade-offs and risks.
Key considerations include:
- Options strategies can limit upside participation during strong market advances
- Covered call strategies may not reduce volatility in all market environments
- The Fund is new and has a limited operating history
- ETF shares may trade at a premium or discount to NAV
- Distributions are not guaranteed and may vary
- A portion of distributions may consist of return of capital
Investors should read the Prospectus carefully for complete information about the Fund’s investment objective, strategies, risks, charges, and expenses.
Why can SEPI’s distribution rate differ from its SEC yield?
SEPI’s distribution rate and 30-Day SEC yield measure different things.
The distribution rate reflects the current distribution relative to NAV per share and may include multiple components, such as option premium, dividends, capital gains, interest income, and return of capital.
The 30-Day SEC yield is a standardized yield calculation that reflects income earned from dividends and interest, net of expenses, over the period. It does not include option income in the same way the distribution rate may reflect broader sources of cash flow.
For investors comparing equity income ETFs, this distinction is important because a higher distribution rate does not necessarily mean a higher standardized yield.
Does SEPI pay monthly distributions?
SEPI is designed to seek cash flow through its investment strategy, but investors should review the Fund’s current distribution information on the fund page for the most recent details. Distribution amounts and frequency may change over time and are not guaranteed.
How do I access SEPI and where does it trade?
SEPI is listed on NYSE Arca. Investors can generally access the Fund through brokerage accounts and advisory platforms that offer ETF trading.
Availability may vary by platform, advisor, or custodian.
Where can I find SEPI holdings and fund documents?
You can find SEPI fund documents and portfolio information on the SEPI fund page, including:
- Fact Sheet
- Prospectus
- Statement of Additional Information
- Holdings information
These materials can help investors better understand the Fund’s strategy, portfolio, risks, and current positioning.
Where does SEPI fit in an income-focused portfolio?
SEPI may be considered by investors exploring income-oriented ETF strategies, especially those interested in the combination of large-cap equity exposure and an options-based income approach. Whether it fits in a portfolio depends on the investor’s objectives, tax considerations, overall asset allocation, and tolerance for equity and options-related risk.
Sept – backup
The Shelton Equity Premium Income ETF (the “Fund”) objective is to seek to achieve a high level of income and capital appreciation (when consistent with high income) by investing primarily in income-producing U.S. equity securities.
The Shelton Equity Premium Income ETF is distributed by Paralel Distributors LLC, Member Firm. Shelton Capital Management is not affiliated with Paralel Distributors LLC.
SEPI Fund Disclosures
An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. To obtain a prospectus containing this and other information, please call (800) 955-9988 or visit www.sheltoncap.com/sepi. Read the prospectus carefully before investing.
Exchange Traded Funds (“ETFs”) are subject to the possible loss of principal. The value of the ETFs will fluctuate with the value of the underlying securities. ETF Shares may trade at prices above or below NAV. Liquidity isn’t guaranteed, and trading may be halted due to market-wide or security-specific events, delisting, or exchange actions.
The Fund is new with a limited operating history.
The value of the Fund’s equity holdings may decline, sometimes unpredictably, due to broader economic, political, or market conditions not specific to individual companies. Because the Fund is primarily invested in U.S. stocks, its value will fluctuate with overall market movements and may decline during market downturns, potentially resulting in losses. The Fund’s use of call and put options can limit upside potential and increase costs, particularly if market movements render the options ineffective or result in expired contracts without value.
Investments in derivatives may be riskier than other types of investments. They may be more sensitive to changes in economic or market conditions than other types of investments. Many derivatives create leverage, which could lead to greater volatility and losses that significantly exceed the original investment. Positions in equity options can reduce equity market risk, but can limit the opportunity to profit from an increase in the market value of stocks in exchange for upfront cash as the time of selling the call option. Unusual market conditions or the lack of a ready market for any particular option at a specific time may reduce the effectiveness of option strategies and could result in losses.
© 2026 Morningstar, Inc. All rights reserved. The information contained herein relating to Morningstar: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
The Morningstar Rating™ for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
Cash flow is the money generated or available to distribute to shareholders. Distributions may include option premium, ordinary dividends, interest income, capital gains, and return of capital. Distributions may coincide with a decline in NAV. Distribution levels may vary and no minimum distribution amount can be guaranteed.
INVESTMENTS ARE NOT FDIC INSURED OR BANK GUARANTEED AND MAY LOSE VALUE.