I think there is a lot of confusion here. This is not an index fund. You can't buy it. It's just an index, a number that tells you what the price is.
It may be a step toward a future index fund designed to track the index, the way SPY tracks the S&P 500 and DIA tracks the Dow Jones Industrial Average. But for now, it's only an index.
S&P has indices that have options contract directly on them. Which is way more fun!
Also, index options enjoy the same better taxation that futures contracts do, as they are both Section 1256 contracts. Where no matter how long the trade is, 60% of the profits are taxed at long term capital gains rates and the other 40% are taxed at short term capital gains rates.
Gotta read between the lines :) This is a great step for what could be a wildly popular product.
Sure, and the futures have been available for a long time already. But an index fund is far simpler and more accessible, and can also be 100% long term capital gains. Most people can't trade options in their 401k.
They aren't launching an index fund though, so 401K accounts that couldn't hold index options would not benefit in any capacity from this product. This product can only be a reference value and also infrastructure for index options launches.
It may be a step toward a future index fund designed to track the index, the way SPY tracks the S&P 500 and DIA tracks the Dow Jones Industrial Average. But for now, it's only an index.