YieldMaxTM Bitcoin Option Income Strategy ETF
Name
As of 09/06/2024Price
Aum/Mkt Cap
YIELD
Exp Ratio
Watchlist
Vitals
YTD Return
N/A
1 yr return
N/A
3 Yr Avg Return
N/A
5 Yr Avg Return
N/A
Net Assets
$55.6 M
Holdings in Top 10
91.5%
52 WEEK LOW AND HIGH
Expenses
OPERATING FEES
Expense Ratio 0.99%
SALES FEES
Front Load N/A
Deferred Load N/A
TRADING FEES
Turnover N/A
Redemption Fee N/A
Min Investment
Standard (Taxable)
N/A
IRA
N/A
Fund Classification
Fund Type
Exchange Traded Fund
Name
As of 09/06/2024Price
Aum/Mkt Cap
YIELD
Exp Ratio
Watchlist
YBIT - Profile
Distributions
- YTD Total Return N/A
- 3 Yr Annualized Total Return N/A
- 5 Yr Annualized Total Return N/A
- Capital Gain Distribution Frequency N/A
- Net Income Ratio N/A
- Dividend Yield 65.6%
- Dividend Distribution Frequency Monthly
Fund Details
-
Legal NameYieldMaxTM Bitcoin Option Income Strategy ETF
-
Fund Family NameN/A
-
Inception DateApr 23, 2024
-
Shares OutstandingN/A
-
Share ClassN/A
-
CurrencyUSD
-
Domiciled CountryUS
Fund Description
The Fund is an actively managed exchange-traded fund (“ETF”) that seeks current income while providing indirect exposure to the share price (i.e., the price returns) of one or more select U.S.-listed exchange-traded products (“ETP”) that seek exposure to Bitcoin, which is a “cryptocurrency” (each an “Underlying ETP” and collectively, the “Underlying ETPs”), subject to a limit on potential investment gains as a result of the nature of the options strategy it employs. Although Bitcoin may be referred to as a “cryptocurrency” it is not yet widely accepted as a means of payment. The Fund uses a synthetic covered call strategy that is designed to provide income and indirect exposure to the share price returns of one or more Underlying ETPs. In addition, the strategy is designed to produce higher income levels when the Underlying ETP experiences or Underlying ETPs experience, as applicable, more volatility.
An Underlying ETP may include both:
● | an ETP that invests directly in Bitcoin as its primary underlying asset, and |
● | an ETP that invests indirectly in Bitcoin via derivatives contracts based on Bitcoin’s prices. |
The Fund does not invest directly in Bitcoin or any other digital assets. The Fund does not invest directly in derivatives that track the performance of Bitcoin or any other digital assets. The Fund does not invest in or seek direct exposure to the current “spot” or cash price of Bitcoin. Investors seeking direct exposure to the price of Bitcoin should consider an investment other than the Fund.
The Fund’s options contracts provide:
● | indirect exposure to the share price returns of each Underlying ETP, |
● | current income from the option premiums, and |
● | a limit on the Fund’s participation in gains, if any, of the share price returns of each Underlying ETP. |
For more information, see sections “The Fund’s Use of the Underlying ETP Option Contracts” and “Synthetic Covered Call Strategy” below.
The Fund’s investment adviser is Tidal Investments LLC (the “Adviser”), and the investment sub-adviser is ZEGA Financial, LLC (“ZEGA” or the “Sub-Adviser”).
Why invest in the Fund?
● | The Fund seeks to participate in a portion of the gains experienced by each Underlying ETP. |
● | The Fund seeks to generate monthly income, which is not dependent on the price appreciation of an Underlying ETP. |
● | The Fund seeks to generate monthly income from option premiums that could potentially be elevated due to the anticipated volatility associated with each Underlying ETP’s Bitcoin investments. |
That is, although the Fund may not fully participate in gains in an Underlying ETP’s share price, the Fund’s portfolio is designed to generate income.
An Investment in the Fund is not an investment in any Underlying ETP
● | The Fund’s strategy will cap its potential gains tied to a particular ETP if that Underlying ETP’s shares increase in value. |
● | The Fund’s strategy is subject to all potential losses (in proportion to its allocation to an Underlying ETP), if the Underlying ETP’s shares decrease in value, which may not be offset by income received by the Fund. |
● | The Fund does not invest directly in any Underlying ETP. |
● | Fund shareholders are not entitled to any Underlying ETP’s distributions. |
The Fund’s Use of the Underlying ETP Option Contracts
As part of the Fund’s synthetic covered call strategy, the Fund will purchase and sell a combination of standardized exchange-traded and FLexible EXchange® (“FLEX”) call and put option contracts that correspond to an Underlying ETP and whose values are based on the share price of such Underlying ETP.
● | In general, an option contract gives the purchaser of the option contract the right to purchase (for a call option) or sell (for a put option) the underlying asset (like shares of an Underlying ETP) at a specified price (the “strike price”). |
● | If exercised, an option contract obligates the seller to deliver shares (for a sold or “short” call) or buy shares (for a sold or “short” put) of the underlying asset at a specified price (the “strike price”). |
● | Options contracts must be exercised or traded to close within a specified time frame, or they expire. See the chart in section “Fund Portfolio” below for a description of the option contracts utilized by the Fund. |
Standardized exchange-traded options include standardized terms. FLEX options are also exchange-traded, but they allow for customizable terms (e.g., the strike price can be negotiated). For more information on FLEX options, see “Additional Information about the Fund – Exchange Traded Options Portfolio.”
The values of the Fund’s options contracts are based on the share price of the corresponding Underlying ETP, which gives the Fund the right or obligation to receive or deliver shares of such Underlying ETP on the expiration date of the applicable option contract in exchange for the stated strike price, depending on whether the option contract is a call option or a put option, and whether the Fund purchases or sells the option contract.
Synthetic Covered Call Strategy
In seeking to achieve its investment objective, the Fund will implement a “synthetic covered call” strategy using the standardized exchange-traded and FLEX options described above.
● | A traditional covered call strategy is an investment strategy where an investor (the Fund) sells a call option on an underlying security it owns. |
● | A synthetic covered call strategy is similar to a traditional covered call strategy in that the investor sells a call option that is based on the value of the underlying security. However, in a synthetic covered call strategy, the investor (the Fund) does not own the underlying security, but rather seeks to synthetically replicate 100% of the price movements of the underlying security through the use of various investment instruments. |
The Fund’s synthetic covered call strategy consists of the following three elements, each of which is described in greater detail farther below:
● | Synthetic long exposure to each Underlying ETP, which allows the Fund to seek to participate in the changes, up or down, in the price of the Underlying ETP’s shares. |
● | Covered call writing (where each Underlying ETP’s call options are sold against the synthetic long portion of the strategy), which allows the Fund to generate income. |
● | U.S. Treasuries, which are used for collateral for the options, and which also generate income. |
1. | Synthetic Long Exposure |
To achieve a synthetic long exposure to each Underlying ETP, the Fund will buy call options on each Underlying ETP and, simultaneously, sell put options on each Underlying ETP to try to replicate the price movements of the Underlying ETP. The call options purchased by the Fund and the put options sold by the Fund will generally have one-month to one-year terms and strike prices that are approximately equal to the then-current share price of their corresponding Underlying ETP at the time the contracts are purchased and sold, respectively. The combination of the long call options and sold put options provides the Fund with investment exposure equal to approximately 100% of their corresponding Underlying ETP for the duration of the applicable options exposure.
2. | Covered Call Writing |
As part of its strategy, the Fund will write (sell) call option contracts on each Underlying ETP to generate income. Since the Fund does not directly own the Underlying ETP, these written call options will be sold short (i.e., selling a position it does not currently own). The Fund will seek to capture a portion of each Underlying ETP’s share price appreciation (generally no more than 15%) in a given month. The call options written (sold) by the Fund will generally have an expiration of one month or less (the “Call Period”) and a strike price that is approximately 5%-15% above the then-current share price of their corresponding Underlying ETP at the time of such sales.
It is important to note that the sale of the call option contracts on a particular Underlying ETP will limit the Fund’s participation in the appreciation in that Underlying ETP’s share price. If the share price of that Underlying ETP increases, the above-referenced synthetic long exposure alone would allow the Fund to experience similar percentage gains. However, if the Underlying ETP’s share price appreciates beyond the strike price of one or more of the sold (short) call option contracts, the Fund will lose money on those short call positions, and the losses will, in turn, limit the upside return of the Fund’s synthetic long exposure. As a result, the Fund’s overall strategy (i.e., the combination of the synthetic long exposure to an Underlying ETP and the sold (short) Underlying ETP call positions) will limit the Fund’s participation in gains in such Underlying ETP’s share price beyond a certain point.
3. | U.S. Treasuries |
The Fund will hold short-term U.S. Treasury securities as collateral in connection with the Fund’s synthetic covered call strategy.
The Fund intends to continuously maintain indirect exposure to each Underlying ETP through the use of options contracts. As the options contracts it holds are exercised or expire it may enter into new options contracts, a practice referred to as “rolling.” The Fund’s practice of rolling options may result in high portfolio turnover.
Fund’s Monthly Distributions
The Fund will seek to provide monthly income in the form of cash distributions. The Fund will seek to generate such income in the following ways:
● | Writing (selling) call option contracts on each Underlying ETP as described above. The income comes mainly from the option premiums received from these option sales. A premium, in this context, refers to the price the option buyer pays to the option seller (the Fund) for the rights granted by the option. The amount of these premiums is largely affected by the fluctuations in share prices of the Underlying ETP. However, other elements like interest rates can also influence the income level. |
● | Investing in short-term U.S. Treasury securities. The income generated by such securities will be influenced by interest rates at the time of investment. |
Information About Bitcoin
As noted above, the Fund does not invest directly in Bitcoin or any other digital assets. The Fund does not invest directly in derivatives that track the performance of Bitcoin or any other digital assets. The Fund does not invest in or seek direct exposure to the current “spot” or cash price of Bitcoin. Investors seeking direct exposure to the price of Bitcoin should consider an investment other than the Fund. However, the Underlying ETPs may invest directly or indirectly (e.g., via futures) in Bitcoin. The following provides an overview of Bitcoin, the Bitcoin Blockchain, the relationship between the two, as well as their use cases.
Bitcoin Description:
Bitcoin, the first and most well-known cryptocurrency, operates on a decentralized network using blockchain technology to facilitate secure and anonymous transactions. Bitcoin represents a digital asset that functions as a medium of exchange utilizing cryptographic protocols to secure transactional processes, control the creation of additional units, and verify the transfer of assets. Its operation on a decentralized blockchain network ensures both transparency and immutability of records, without the need for a central authority. This innovative technology underpinning Bitcoin allows for peer-to-peer transactions and provides a framework for digital scarcity, making Bitcoin a unique investment commodity within the digital currency landscape.
Bitcoin Blockchain Description:
The Bitcoin blockchain constitutes a decentralized, digital ledger technology that chronologically and publicly records all Bitcoin transactions. This technology is characterized by its use of blocks, which are structurally linked in a chain through cryptographic hashes. Each block contains a list of transactions that, once verified and added to the blockchain through a consensus process known as proof of work, becomes irreversible and tamper-evident. The integrity, transparency, and security of the transactional data are maintained autonomously within the Bitcoin network, eliminating the necessity for central oversight and facilitating trust in a peer-to-peer system.
The Relationship between Bitcoin and Bitcoin Blockchain:
Bitcoin is a digital currency that operates on the Bitcoin blockchain, a decentralized and cryptographic ledger system. The Bitcoin blockchain underpins the entire Bitcoin network, providing a secure and transparent mechanism for recording Bitcoin transactions. Each Bitcoin transaction is verified by network participants and permanently recorded on the Bitcoin blockchain, ensuring the integrity and traceability of the digital currency. Thus, while Bitcoin serves as a medium of exchange or store of value, the Bitcoin blockchain acts as the immutable record-keeping system that facilitates and authenticates the circulation and ownership of Bitcoin. This symbiotic relationship ensures that Bitcoin operates in a trustless and decentralized manner, with the Bitcoin blockchain maintaining the currency's history and scarcity.
Bitcoin and Bitcoin Blockchain Use Cases:
Bitcoin and the Bitcoin blockchain serve as innovative financial instruments within the digital economy, offering multiple use cases. However, their adoption has been limited. Key applications include:
1. | Decentralized Transactions: Bitcoin facilitates peer-to-peer financial transactions globally without the need for intermediaries, reducing transaction costs and times. This feature makes it an attractive option for cross-border transfers and remittances. |
2. | Store of Value: Due to its limited supply and decentralized nature, Bitcoin is perceived as a digital alternative to traditional stores of value like gold, potentially serving as a hedge against inflation and currency devaluation. |
3. | Smart Contracts: While primarily associated with other blockchain platforms, the Bitcoin blockchain can execute smart contracts—self-executing contractual agreements with the terms directly written into code—thereby enabling automated and conditional transactions. |
4. | Asset Tokenization: The Bitcoin blockchain provides a platform for tokenizing assets, converting rights to an asset into a digital token on the blockchain. This can include real estate, stocks, or other forms of assets, enhancing liquidity and market efficiency. |
5. | Digital Identity Verification: Leveraging the security and immutability of the Bitcoin blockchain, companies can develop digital identity verification systems, enhancing privacy and reducing identity theft. |
Fund Portfolio
The Fund’s principal holdings are described below:
YieldMax Bitcoin Income Strategy ETF – Principal Holdings | ||
Portfolio Holdings | Investment Terms | Expected Target Maturity |
Purchased call option contracts | “at-the-money” (i.e., the strike price is equal to the then-current share price of an Underlying ETP at the time of purchase) to provide exposure to positive price returns of the Underlying ETP. If the share price of an Underlying ETP increases, these options will generate corresponding increases to the Fund. | 1-month to 6-month expiration dates |
Sold put option contracts | “at-the-money” (i.e., the strike price is equal to the then-current share price of their corresponding Underlying ETP at the time of sale). They are sold to help pay for the purchased call options described above. However, the sold put option contracts provide exposure to the full extent of any share price losses experienced by the corresponding Underlying ETP. | 1-month to 6-month expiration dates |
Sold (short) call option contracts | The strike price is approximately 0%-15% more than the then-current share price of a particular Underlying ETP at the time of sale. They generate current income. However, they also limit some potential positive returns that the Fund may have otherwise experienced from gains in the share price of a particular Underlying ETP. | 1-month or less expiration dates |
U.S Treasury Securities and Cash | Multiple series of U.S. Treasury Bills supported by the full faith and credit of the U.S. government. These instruments are used as collateral for the Fund’s derivative investments. They will also generate income. | 6-month to 2-year maturities |
The market value of the cash and treasuries held by the Fund is expected to be between 50% and 100% of the Fund’s net assets and the market value of the options package is expected to be between 0% and 50% of the Fund’s net assets. In terms of notional value, the combination of these investment instruments provides indirect investment exposure to the Underlying ETP or Underlying ETPs, as applicable, equal to at least 100% of the Fund’s total assets.
The Fund is classified as “non-diversified” under the 1940 Act.
Under normal circumstances, the Fund will invest at least 80% of its net assets, plus borrowings for investment purposes, in options contracts that utilize an Underlying ETP as the reference asset. For purposes of compliance with this investment policy, derivative contracts will be valued at their notional value.
Single Underlying ETP
At the time of this prospectus, options contracts are available for only one Underlying ETF, namely, the Bitcoin Strategy ETF (ticker: BITO). BITO is an ETF that is registered with the SEC under the 1940 Act. BITO seeks to achieve its investment objective primarily through managed exposure to Bitcoin futures contracts. In this manner, it seeks to provide investment results that correspond to the performance of Bitcoin. BITO’s prospectus, periodic reports and other information filed with the SEC pursuant to the federal securities laws are available in the EDGAR database on the SEC’s website at www.sec.gov. BITO is listed on the NYSE Arca stock exchange.
There is no guarantee that the Fund’s investment strategy will be properly implemented, and an investor may lose some or all of its investment.
YBIT - Performance
Return Ranking - Trailing
Period | YBIT Return | Category Return Low | Category Return High | Rank in Category (%) |
---|---|---|---|---|
YTD | N/A | 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
Return Ranking - Calendar
Period | YBIT 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 |
Total Return Ranking - Trailing
Period | YBIT Return | Category Return Low | Category Return High | Rank in Category (%) |
---|---|---|---|---|
YTD | N/A | 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
Total Return Ranking - Calendar
Period | YBIT 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 |
YBIT - Holdings
Concentration Analysis
YBIT | Category Low | Category High | YBIT % Rank | |
---|---|---|---|---|
Net Assets | 55.6 M | N/A | N/A | N/A |
Number of Holdings | 8 | N/A | N/A | N/A |
Net Assets in Top 10 | 4.34 M | N/A | N/A | N/A |
Weighting of Top 10 | 91.54% | N/A | N/A | N/A |
Top 10 Holdings
- United States Treasury Note/Bond 37.81%
- United States Treasury Note/Bond 37.79%
- United States Treasury Bill 17.42%
- First American Government Obligations Fund 12.50%
- BITO 05/17/2024 29.01 C 0.97%
- ProShares Bitcoin Strategy ETF -0.08%
- ProShares Bitcoin Strategy ETF -0.14%
- BITO 05/17/2024 29.01 P -14.73%
Asset Allocation
Weighting | Return Low | Return High | YBIT % Rank | |
---|---|---|---|---|
Bonds | 93.02% | N/A | N/A | N/A |
Cash | 20.96% | 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 | -13.98% | N/A | N/A | N/A |
Bond Sector Breakdown
Weighting | Return Low | Return High | YBIT % Rank | |
---|---|---|---|---|
Cash & Equivalents | 12.50% | 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 | -13.98% | N/A | N/A | N/A |
Bond Geographic Breakdown
Weighting | Return Low | Return High | YBIT % Rank | |
---|---|---|---|---|
US | 93.02% | N/A | N/A | N/A |
Non US | 0.00% | N/A | N/A | N/A |
YBIT - Expenses
Operational Fees
YBIT Fees (% of AUM) | Category Return Low | Category Return High | Rank in Category (%) | |
---|---|---|---|---|
Expense Ratio | 0.99% | N/A | N/A | N/A |
Management Fee | 0.99% | 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 |
Sales Fees
YBIT 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 |
Trading Fees
YBIT Fees (% of AUM) | Category Return Low | Category Return High | Rank in Category (%) | |
---|---|---|---|---|
Max Redemption Fee | N/A | N/A | N/A | N/A |
Related Fees
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.
YBIT Fees (% of AUM) | Category Return Low | Category Return High | Rank in Category (%) | |
---|---|---|---|---|
Turnover | N/A | N/A | N/A | N/A |
YBIT - Distributions
Dividend Yield Analysis
YBIT | Category Low | Category High | YBIT % Rank | |
---|---|---|---|---|
Dividend Yield | 65.60% | N/A | N/A | N/A |
Dividend Distribution Analysis
YBIT | Category Low | Category High | Category Mod | |
---|---|---|---|---|
Dividend Distribution Frequency | Monthly |
Net Income Ratio Analysis
YBIT | Category Low | Category High | YBIT % Rank | |
---|---|---|---|---|
Net Income Ratio | N/A | N/A | N/A | N/A |
Capital Gain Distribution Analysis
YBIT | Category Low | Category High | Capital Mode | |
---|---|---|---|---|
Capital Gain Distribution Frequency |
Distributions History
Date | Amount | Type |
---|---|---|
Sep 06, 2024 | $0.722 | OrdinaryDividend |
Aug 07, 2024 | $0.671 | OrdinaryDividend |
Jul 05, 2024 | $1.216 | OrdinaryDividend |
Jul 05, 2024 | $1.216 | OrdinaryDividend |
Jun 06, 2024 | $1.371 | OrdinaryDividend |