April 9 (Reuters) - Westwood Holdings Group Tuesday launched its first exchange-traded fund (ETF), a vehicle combining investments in energy infrastructure businesses with an option overlay strategy.

The Westwood Salient Enhanced Midstream Income ETF aims to deliver a yield of 10% or more through dividend income from midstream energy stocks and income from selling out-of-the-money call options on individual stocks, said Greg Reid, the fund's portfolio manager.

The new fund is the latest entrant in a category that has become increasingly popular in recent years. Many issuers have been eager to capitalize on the runaway success of the JPMorgan Equity Premium Income ETF. That fund's assets stand at $33 billion and it attracted inflows of more than $13 billion in 2023 alone, according to Morningstar.

"Covered call funds have been one of the key ETF market trends in the last few years, and has been one of the largest forces attracting assets in the last year," said Todd Rosenbluth, head of ETF strategy at VettaFi.

After five years of considering an ETF launch, "the explosion of interest in covered call option ETFs" accelerated plans, Reid said.

Energy infrastructure holdings have outperformed the broader energy complex over the last 12 months. The Alerian Midstream Energy Index, which has holdings in Enbridge Inc and Cheniere Energy Ltd, is up 15% in that period, while the Dow Jones U.S. Oil & Gas Index has gained 13.1%.

Dallas-based Westwood has $16 billion in assets under management in mutual funds and separate accounts. Reid said that some of its clients currently are investors in a similar strategy in separate accounts and likely will move their holdings to the ETF as a more liquid and tax-efficient alternative.

(Reporting by Suzanne McGee; Editing by Ira Iosebashvili and Stephen Coates)