*Defiance ETFs Announces Monthly Distributions on $QQQY (40.79%), $JEPY (32.48%), and $IWMY (57.22%)
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Insights
The announcement by Defiance ETFs regarding the monthly distributions for their various ETFs, including QQQY, JEPY and IWMY, showcases significant distribution rates. A distribution rate of 40.79% for QQQY, 32.48% for JEPY and 57.22% for IWMY could be indicative of a high level of options income generated by these funds. Investors may view this as a positive signal, reflecting the potential for income generation from these ETFs.
However, such high distribution rates may also raise questions about the sustainability of these payouts, especially if they are largely a result of option premiums or other non-recurring income sources. It's important to consider whether these rates are inflated by capital gains distributions, which are a one-time benefit, or if they reflect the true income-generating potential of the ETFs' underlying strategies.
Investors should also be aware of the ex-date and record date when considering these ETFs, as these dates determine eligibility for the current month's distribution. The timing of these distributions, with payment dates shortly after the new year, could have tax implications for investors, depending on their individual circumstances.
The distributions announced by Defiance ETFs have potential tax implications for investors. Given the timing of the distributions, with a record date at the end of December and a payment date in early January, investors need to plan for the tax consequences in two different tax years. This is particularly relevant for those in higher tax brackets or those who may be subject to the Net Investment Income Tax (NIIT).
Furthermore, the nature of the income distributed (whether it's classified as ordinary income, qualified dividend, or return of capital) will affect the tax treatment. High distribution rates could lead to higher taxable income for the year in which they are received. Investors should consult with tax professionals to understand the character of these distributions and optimize their after-tax return.
The performance of Defiance ETFs' enhanced options income ETFs, as indicated by their distribution rates, can be a point of interest for market research. The distribution rates are remarkably high, which could signal that these ETFs are employing successful options strategies, such as covered calls or puts, to generate additional income.
It is crucial to analyze the standardized performance of these ETFs to understand the risk-adjusted returns they offer, especially since their inception dates are relatively recent in 2023. The performance metrics will provide a clearer picture of how these ETFs are managing the balance between option income generation and the preservation of capital, which is a key aspect for investors seeking income without excessive risk.
Comparing these ETFs' performance and distributions with industry benchmarks and peer funds will also offer valuable insights into their competitive standing within the enhanced income ETF market segment.
Defiance ETFs Announces Monthly Distributions on $QQQY (
Distribution as of 12/26/2023
ETF
|
Distribution
|
Distribution
|
Ex-Date |
Record
|
Payment
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|||||||||||
QQQY |
|
|
12/28/2023 |
12/29/2023 |
1/4/2024 |
|||||||||||
JEPY |
|
|
12/28/2023 |
12/29/2023 |
1/4/2024 |
|||||||||||
IWMY |
|
|
12/28/2023 |
12/29/2023 |
1/4/2024 |
QQQY Inception Date: 9/13/2023
Click here for QQQY Standardized Performance.
JEPY Inception Date: 9/18/2023
Click here for JEPY Standardized Performance
IWMY Inception Date: 10/30/2023
Click here for IWMY Standardized Performance
About Us: Founded in 2018, Defiance stands as a leading ETF issuer dedicated to income and thematic investing. Defiance's actively managed options ETFs are designed to potentially enhance income, paid on monthly basis.
The performance data quoted above represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted above. Performance current to the most recent month-end can be obtained by calling 833.333.9383.
As of 11/30/2023 the 30 Day SEC yield** for QQQY is
The Gross Expense Ratio for QQQY, JEPY, and IWMY is
Click here for the QQQY Prospectus.
Click here for the JEPY Prospectus.
Click here for the IWMY Prospectus.
* The Distribution Rate is the annual yield an investor would receive if the most recently declared distribution, which includes option income, remained the same going forward. The Distribution Rate is calculated by multiplying an ETF’s Distribution per Share by twelve (12), and dividing the resulting amount by the ETF’s most recent NAV. The Distribution Rate represents a single distribution from the ETF and does not represent its total return. Distributions are not guaranteed.
** The Distribution Rate and 30-Day SEC Yield is not indicative of future distributions, if any, on the ETFs. In particular, future distributions on any ETF may differ significantly from its Distribution Rate or 30-Day SEC Yield. You are not guaranteed a distribution under the ETFs. Distributions for the ETFs (if any) are variable and may vary significantly from month to month and may be zero. Accordingly, the Distribution Rate and 30-Day SEC Yield will change over time, and such change may be significant. The distribution may include a combination of ordinary dividends, capital gain, and return of investor capital, which may decrease a fund's NAV and trading price over time. As a result, an investor may suffer significant losses to their investment. These distribution rates caused by unusually favorable market conditions may not be sustainable. Such conditions may not continue to exist and there should be no expectation that this performance may be repeated in the future. Additional fund risks can be found below.
“Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call 833.333.9383. Read the prospectus or summary prospectus carefully before investing.”
Investing involves risk. Principal loss is possible. As an ETF, the funds may trade at a premium or discount to NAV. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.
The Distribution Rate is the annual yield an investor would receive if the most recently declared distribution, which includes option income, remained the same going forward. The Distribution Rate is calculated by multiplying an ETF’s Distribution per Share by twelve (12), and dividing the resulting amount by the ETF’s most recent NAV. The Distribution Rate represents a single distribution from the ETF and does not represent its total return. Distributions are not guaranteed.
QQQY Index Overview: The Nasdaq 100 Index is a benchmark index that includes 100 of the largest non-financial companies listed on the Nasdaq Stock Market, based on market capitalization. This makes it a large-cap index, meaning its constituents have a high market value, often in the billions of dollars. The Index includes companies from various industries but is heavily weighted towards the technology sector. This reflects the Nasdaq’s historic strength as a listing venue for tech companies. Other sectors represented include consumer discretionary, health care, communication services, and industrials, among others.
JEPY Index Overview: The S&P 500 Index is a widely recognized benchmark index that tracks the performance of 500 of the largest
IWMY Index Overview: The Russell 2000 Index is a widely recognized benchmark index that tracks the performance of approximately 2000 small-cap companies in
QQQY Indirect Investment Risk. The Index is not affiliated with the Trust, the Fund, the Adviser, the Sub-Adviser, or their respective affiliates and is not involved with this offering in any way. Investors in the Fund will not have the right to receive dividends or other distributions or any other rights with respect to the companies that comprise the Index but will be subject to declines in the performance of the Index. The Nasdaq 100 Index is a benchmark index that includes 100 of the largest non-financial companies listed on the Nasdaq Stock Market, based on market capitalization. This makes it a large-cap index, meaning its constituents have a high market value, often in the billions of dollars.
JEPY Indirect Investment Risk. The Index is not affiliated with the Trust, the Fund, the Adviser, the Sub-Adviser, or their respective affiliates and is not involved with this offering in any way. Investors in the Fund will not have the right to receive dividends or other distributions or any other rights with respect to the companies that comprise the Index but will be subject to declines in the performance of the Index.
IWMY Indirect Investment Risk: The Index is not affiliated with the Trust, the Fund, the Adviser, the Sub-Adviser, or their respective affiliates and is not involved with this offering in any way. Investors in the Fund will not have the right to receive dividends or other distributions or any other rights with respect to the companies that comprise the Index but will be subject to declines in the performance of the Index.
An Investment in the Fund is not an investment in the Index, nor is the Fund an investment in a traditional passively managed index fund.
Index Trading Risk. The trading price of the Index may be highly volatile and could continue to be subject to wide fluctuations in response to various factors. The stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies.
S&P 500 Index Risks: The Index, which includes a broad swath of large
The Nasdaq 100 Index Risks: The Index’s major risks stem from its high concentration in the technology sector and significant exposure to high-growth, high valuation companies. A downturn in the tech industry, whether from regulatory changes, shifts in technology, or competitive pressures, can greatly impact the index. It’s also vulnerable to geopolitical risks due to many constituent companies having substantial international operations. Since many of these tech companies often trade at high valuations, a shift in investor sentiment could lead to significant price declines.
The Russell 2000 Index Risks: The Index, which includes a broad swath of large
Derivatives Risk. Derivatives are financial instruments that derive value from the underlying reference asset or assets, such as stocks, bonds, or funds (including ETFs), interest rates or indexes. The Fund's investments in derivatives may pose risks in addition to, and greater than, those associated with directly investing in securities or other ordinary investments, including risk related to the market, imperfect correlation with underlying investments, higher price volatility, lack of availability, counterparty risk, liquidity, valuation and legal restrictions.
Price Participation Risk. The Fund employs an investment strategy that includes the sale of in-the-money put option contracts, which limits the degree to which the Fund will participate in increases in value experienced by the Index over the Call Period (typically, one day, but may range up to one week). This means that if the Index experiences an increase in value above the strike price of the sold put options during a Call Period, the Fund will likely not experience that increase to the same extent and may significantly underperform the Index over the Call Period. Additionally, because the Fund is limited in the degree to which it will participate in increases in value experienced by the Index over each Call Period, but has full exposure to any decreases in value experienced by the Index over the Call Period, the NAV of the Fund may decrease over any given time period.
Distribution Risk. As part of the Fund's investment objective, the Fund seeks to provide current monthly income. There is no assurance that the Fund will make a distribution in any given month. If the Fund does make distributions, the amounts of such distributions will likely vary greatly from one distribution to the next.
New Fund Risk. The Fund is a recently organized management investment company with no operating history. As a result, prospective investors do not have a track record or history on which to base their investment decisions.
High Portfolio Turnover Risk. The Fund may actively and frequently trade all or a significant portion of the Fund’s holdings. A high portfolio turnover rate increases transaction costs, which may increase the Fund’s expenses.
Liquidity Risk. Some securities held by the Fund, including options contracts, may be difficult to sell or be illiquid, particularly during times of market turmoil. This risks greater for the Fund as it will hold options contracts on a single security, and not a broader range of options contracts.
Disclosures: Defiance ETFs LLC is the ETF sponsor. The Fund’s investment adviser is Toroso Investments, LLC (“Toroso” or the “Adviser”). The Fund Administrator is Tidal ETF Services LLC. The investment sub-adviser is ZEGA Financial, LLC (“ZEGA” or the “Sub-Adviser”).
JEPY, QQQY, and IWMY are distributed by Foreside Fund Services, LLC.
View source version on businesswire.com: https://www.businesswire.com/news/home/20231226306627/en/
Frank Taylor
(646) 808-3647
defiance@dlpr.com
Source: Defiance ETFs
FAQ
What are the monthly distributions announced by Defiance ETFs for QQQY, JEPY, and IWMY?
When is the ex-date, record date, and payment date for the distributions?
What are the inception dates for QQQY, JEPY, and IWMY?
