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Critical Facts You Need to Know About Preferred Stocks
Have you ever wished for the safety of bonds, but the return potential...
Name
As of 05/06/2024Price
Aum/Mkt Cap
YIELD
Exp Ratio
Watchlist
YTD Return
2.7%
1 yr return
N/A
3 Yr Avg Return
N/A
5 Yr Avg Return
N/A
Net Assets
$11.6 M
Holdings in Top 10
98.6%
Expense Ratio 0.49%
Front Load N/A
Deferred Load N/A
Turnover N/A
Redemption Fee N/A
Standard (Taxable)
N/A
IRA
N/A
Fund Type
Exchange Traded Fund
Name
As of 05/06/2024Price
Aum/Mkt Cap
YIELD
Exp Ratio
Watchlist
The Fund seeks to achieve its objective by combining a strategy of holding U.S. Treasury Bills and/or U.S. Treasury Bonds, with a “credit spread” option strategy to seek to generate enhanced yield. The Fund’s net asset holdings will generally be invested as follows:
● | 2-5% Cash and cash equivalents (including money market funds and U.S. Treasury Bills) |
● | 95-100% Treasury securities. |
● | Up to 90% Credit Spreads (using the Fund’s holdings of Treasury securities as collateral for the Fund’s investments in options). |
The Fund will invest in a portfolio of U.S. Treasury Bills and/or U.S. Treasury Bonds with a targeted portfolio duration of approximately one year and that ZEGA Financial, LLC (“ZEGA” or the “Sub-Adviser”), the Fund’s sub-adviser, believes will generate annual interest income and capital gains. At the same time, the Fund will purchase (buys) and write (sells) put or call options on the following three major equity indexes: the S&P 500® Index, the NASDAQ 100 Index, and the Russell 2000 Index. This strategy is referred to as a “credit spread” or “vertical credit spread” strategy (described more below) and acts as an overlay on the Fund’s portfolio of U.S. government securities.
For the Fund’s credit spread strategy, the Fund enters into credit put spreads or credit call spreads based on the ZEGA’s return versus risk assessment with respect to the broad stock market and the options market. ZEGA manages the Fund using its High Probability Options Strategy (“HiPOS” or the “Strategy”), by which it seeks to provide risk-adjusted returns for the Fund that are uncorrelated to both equity and fixed income markets by using an alternative trading strategy, and reducing the need to predict future market movements. For more information about HiPOS, see the section of the Fund’s Prospectus titled “Additional Information About the Fund.”
Credit Spread Strategy Overview: The Fund employs a strategy referred to as a “credit spread” or “vertical credit spread.” More specifically, the strategy entails the simultaneous purchase and sale of options of the same type (puts or calls) with respect to the same index and with the same expiration date, but at different exercise (“strike”) prices. The Fund will pay premiums on options (puts or calls) that it purchases and will receive premiums when writing options (puts or calls) for a net credit (meaning the premium received is more than what is spent).
To enter into a credit spread, the Fund will sell a put or call (or both) contract and buy a put or call (or both) contract at the same time. These positions will have the same expiration dates and the same contract amounts. The Fund will enter into the same number of contracts for the long and short legs of each spread with the same expiration dates. However, the positions will have different strike prices, which creates a difference in the price of each option (i.e., a “credit”).
The maximum gain for the Fund on any given credit spread is equal to the net premium the Fund receives. The maximum potential loss for the Fund for any given credit spread is equal to the difference between the strike prices of the options on the same index multiplied by the number of contracts or units subject to the option minus net premiums received.
Options Terminology:
In-the-money options are where the price of the underlying asset is above the strike price for calls and below the strike price for puts.
Out-of-the-money (OTM) options are where the price of the underlying asset is below the strike price for calls and above the strike price for puts.
For more information on credit spreads and additional options terminology, see the section of the Fund’s Prospectus titled “Additional Information About the Fund.”
The Fund’s returns will be driven by the interest and capital gains derived from its portfolio of U.S. government securities and its credit spread strategy (e.g., by the difference between the premiums received and paid on these options).
ZEGA analyzes market data to decide when and at what levels to place spread trades for the Fund. The Fund's holdings may include bullish, bearish, or neutral credit spreads. Due to the Fund's design, when appropriate, it can hold neutral positions that lean both bullish and bearish simultaneously. For more information about the Fund's positions during bullish, bearish, and neutral stances, see the section of the Fund's Prospectus titled “Additional Information About the Fund.”
ZEGA constructs a portfolio for the Fund that it believes is not highly dependent on broad stock market fluctuations. This is because the Fund uses OTM credit spreads, which can yield positive returns even when an underlying index doesn’t move much. The strategy also proves beneficial if, at expiration, the strike price of these credit spreads remains OTM. In a “bullish” stance, the Fund typically sees positive returns unless the stock market value nears or falls below the strike price. Conversely, in a “bearish” stance, it benefits unless the stock market value nears or exceeds the strike price.
All option positions held by the Fund are exchange-traded and collateralized with cash, cash equivalents (for example, U.S. Treasury Bills, U.S. Treasury Bonds and money market fund shares).
ZEGA seeks to provide returns for the Fund by employing the credit spread strategy to construct a portfolio of options that ZEGA considers moderately OTM and which it believes have a high probability of successfully expiring worthless. ZEGA determines the Fund’s exposure to each credit spread by first evaluating the risk metrics associated with the relevant position, including the effects of market volatility on equity indexes. ZEGA then calculates potential returns. The Fund will not establish a credit spread position unless ZEGA concludes that the potential rate of return exceeds the probability of a potential loss.
ZEGA employs proprietary analysis techniques to continually monitor the Fund’s credit spreads for potential exit triggers (e.g., the increased probability of an option being exercised in the money) to ascertain if a buyback of a written option is needed. In addition, if markets move favorably early enough in the lifecycle of a trade, ZEGA may exit one or both sides of the relevant position to secure a gain and redeploy the capital at the next market opportunity. For more information about ZEGA’s analysis techniques, see “Additional Information about the Fund” below.
Notwithstanding the Fund’s investment in options, ZEGA intends to create a risk-defined options portfolio by simultaneously purchasing and selling options of the same type in order to limit the Fund’s exposure to traditional leverage risks associated with investing in options.
Under normal market conditions, the Fund will invest at least 90% of its assets in U.S. government securities. In pursuing the credit spread strategy, the Fund will also invest in put and call options on major equity indexes that generally have an exposure of up to 90% of the Fund’s net assets. For more information about the Fund’s allocation to credit spreads, see the section of the Fund’s Prospectus titled “Additional Information about the Fund.”
The Fund is “non-diversified” for purposes of the Investment Company Act of 1940, as amended (the “1940 Act”), which means that the Fund may invest in fewer issuers at any one time than a diversified fund.
Period | THTA Return | Category Return Low | Category Return High | Rank in Category (%) |
---|---|---|---|---|
YTD | 2.7% | N/A | N/A | N/A |
1 Yr | N/A | N/A | N/A | N/A |
3 Yr | N/A* | N/A | N/A | N/A |
5 Yr | N/A* | N/A | N/A | N/A |
10 Yr | N/A* | N/A | N/A | N/A |
* Annualized
Period | THTA Return | Category Return Low | Category Return High | Rank in Category (%) |
---|---|---|---|---|
2023 | N/A | N/A | N/A | N/A |
2022 | N/A | N/A | N/A | N/A |
2021 | N/A | N/A | N/A | N/A |
2020 | N/A | N/A | N/A | N/A |
2019 | N/A | N/A | N/A | N/A |
Period | THTA Return | Category Return Low | Category Return High | Rank in Category (%) |
---|---|---|---|---|
YTD | 2.7% | N/A | N/A | N/A |
1 Yr | N/A | N/A | N/A | N/A |
3 Yr | N/A* | N/A | N/A | N/A |
5 Yr | N/A* | N/A | N/A | N/A |
10 Yr | N/A* | N/A | N/A | N/A |
* Annualized
Period | THTA Return | Category Return Low | Category Return High | Rank in Category (%) |
---|---|---|---|---|
2023 | N/A | N/A | N/A | N/A |
2022 | N/A | N/A | N/A | N/A |
2021 | N/A | N/A | N/A | N/A |
2020 | N/A | N/A | N/A | N/A |
2019 | N/A | N/A | N/A | N/A |
THTA | Category Low | Category High | THTA % Rank | |
---|---|---|---|---|
Net Assets | 11.6 M | N/A | N/A | N/A |
Number of Holdings | 7 | N/A | N/A | N/A |
Net Assets in Top 10 | 9.4 M | N/A | N/A | N/A |
Weighting of Top 10 | 98.65% | N/A | N/A | N/A |
Weighting | Return Low | Return High | THTA % Rank | |
---|---|---|---|---|
Bonds | 98.16% | N/A | N/A | N/A |
Cash | 1.88% | N/A | N/A | N/A |
Stocks | 0.00% | N/A | N/A | N/A |
Preferred Stocks | 0.00% | N/A | N/A | N/A |
Convertible Bonds | 0.00% | N/A | N/A | N/A |
Other | -0.04% | N/A | N/A | N/A |
Weighting | Return Low | Return High | THTA % Rank | |
---|---|---|---|---|
Cash & Equivalents | 0.53% | N/A | N/A | N/A |
Securitized | 0.00% | N/A | N/A | N/A |
Corporate | 0.00% | N/A | N/A | N/A |
Municipal | 0.00% | N/A | N/A | N/A |
Government | 0.00% | N/A | N/A | N/A |
Derivative | -0.04% | N/A | N/A | N/A |
Weighting | Return Low | Return High | THTA % Rank | |
---|---|---|---|---|
US | 98.16% | N/A | N/A | N/A |
Non US | 0.00% | N/A | N/A | N/A |
THTA Fees (% of AUM) | Category Return Low | Category Return High | Rank in Category (%) | |
---|---|---|---|---|
Expense Ratio | 0.49% | N/A | N/A | N/A |
Management Fee | 0.49% | N/A | N/A | N/A |
12b-1 Fee | N/A | N/A | N/A | N/A |
Administrative Fee | N/A | N/A | N/A | N/A |
THTA Fees (% of AUM) | Category Return Low | Category Return High | Rank in Category (%) | |
---|---|---|---|---|
Front Load | N/A | N/A | N/A | N/A |
Deferred Load | N/A | N/A | N/A | N/A |
THTA Fees (% of AUM) | Category Return Low | Category Return High | Rank in Category (%) | |
---|---|---|---|---|
Max Redemption Fee | N/A | N/A | N/A | N/A |
Turnover provides investors a proxy for the trading fees incurred by mutual fund managers who frequently adjust position allocations. Higher turnover means higher trading fees.
THTA Fees (% of AUM) | Category Return Low | Category Return High | Rank in Category (%) | |
---|---|---|---|---|
Turnover | N/A | N/A | N/A | N/A |
THTA | Category Low | Category High | THTA % Rank | |
---|---|---|---|---|
Dividend Yield | 12.03% | N/A | N/A | N/A |
THTA | Category Low | Category High | Category Mod | |
---|---|---|---|---|
Dividend Distribution Frequency | Monthly |
THTA | Category Low | Category High | THTA % Rank | |
---|---|---|---|---|
Net Income Ratio | N/A | N/A | N/A | N/A |
THTA | Category Low | Category High | Capital Mode | |
---|---|---|---|---|
Capital Gain Distribution Frequency |
Date | Amount | Type |
---|---|---|
Mar 28, 2024 | $0.203 | OrdinaryDividend |
Mar 15, 2024 | $0.019 | OrdinaryDividend |
Jan 17, 2024 | $0.172 | OrdinaryDividend |
Dec 15, 2023 | $0.117 | OrdinaryDividend |
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