Amplify ETFs has introduced its second high cash flow ETF.

The Amplify Cash Flow High Income ETF (HCOW) is an actively managed ETF that invests up to 80% of its overall assets into Amplify Cash Flow Dividend Leaders ETF (COWS), a dividend-paying, high-free-cash-flow ETF that the firm launched last month.

The balance of the fund is dedicated to a call income strategy on the S&P 500. The first distribution for the fund will not occur until the end of this month, but Christian Magoon, CEO of Amplify ETFs, said he is anticipating yields as high as 10%

“This is our strategy to do something in the high free cash flow universe,” he said. “[An advisor can] either focus on dividend yielding stock in COWS or focus on dividend-paying stocks with a call income strategy on the S&P 500 in HCOW and be on both ends of the bookshelf and bring something new to the market.”

The goal of the product is to create a fund that investors can use regardless of the market conditions, he said.

"The more volatile the market gets, the more option income it can clip,” Magoon said. “The less volatile the market, the lower the option income clip.”

HCOW will have an expense ratio of 65 basis points while COWS will continue to have a net zero expense ratio for at least a year, according to Magoon. Despite the fact that one ETF will function within another, both ETFs serve a distinct function and goal for advisors, Magoon said.

“Seems like most advisors, if they’re going to allocate something to their core [equity bucket], they want 100% exposure to that asset class ... they don’t necessarily want a hedge as part of that,” he said. “Ultimately, I think for long equity focused advisors, they’re going to go for COWS [and] for advisors who want a bigger stream of income and are comfortable giving up some equity upside, HCOW is going to be their choice.”

HCOW and COWS were always meant to launch together and the firm does not have any immediate plans to roll out additional free cash flow ETFs at this time, Magoon said. The firm wants to see how the two most recent funds fare before making any long-term decisions.

HCOW is available on most major platforms that do not have any restrictions, according to Magoon, and the fund will have a monthly distribution schedule with the first coming later this month.

Magoon called HCOW a “game changer” and said that it manages to take two popular trends that exist in the market and roll them into one ETF.

“There are a lot of assets that have gone into cash flow ETFs, there are a lot of assets that have gone into option writing ETFs,” he said. “This really takes these two concepts and molds them into one.