Defiance Suite of Daily Options (0DTE) Income ETFs, $QQQY, $JEPY & $IWMY Surpass $400M AUM

Rhea-AI Summary

Defiance ETFs (JEPY, QQQY, IWMY) Surpass $400 Million in Assets Under Management (AUM)

Insights

Financial Analyst

The accumulation of over $400 million in assets under management (AUM) by Defiance ETFs' three daily options income ETFs is a significant milestone that reflects investor confidence and the growing interest in income-generating investment vehicles. The ETFs in question, JEPY, QQQY and IWMY, cater to different segments of the market, offering exposure to the S&P 500, Nasdaq-100 and Russell 2000, respectively. This diversification allows investors to choose funds based on their market outlook and risk tolerance.

The reported distribution rates for these ETFs are quite noteworthy, with QQQY at 60.52%, JEPY at 42.14% and IWMY at 71.95%. These rates are exceptionally high and could be indicative of a strategy that prioritizes income distribution over capital growth. Investors should note that while high distribution rates can be attractive, they may also reflect the inclusion of return of capital, which can affect the tax treatment of distributions and the underlying value of the ETF shares.

Given the recent inception dates of these ETFs, it is important for investors to review standardized performance data to understand the funds' track records. While the AUM growth is impressive, it is also essential to consider the funds' expense ratios, liquidity and how the option income is being generated, as these factors can significantly impact net returns.

Industry Analyst

The success of Defiance ETFs in accumulating significant AUM shortly after inception reflects a broader trend in the investment community towards thematic and income-focused funds. The use of options strategies to enhance income is increasingly popular among investors seeking yield in a low-interest-rate environment. However, the use of daily options (0DTE) can imply a higher risk profile due to the short-term nature of the contracts and the potential for increased volatility.

Investors and stakeholders should consider the sustainability of the high distribution rates, which could be challenged by market downturns or increased volatility. The performance of these ETFs during different market cycles will be a critical test of their resilience and the effectiveness of their options strategies. Additionally, the impact of fees on returns and the potential for tracking error against the underlying indexes are important considerations for long-term investors.

Economics Expert

The economic implications of the rise in AUM for Defiance ETFs' option income ETFs are multifaceted. On one hand, the influx of capital into these ETFs signals a shift in investor sentiment towards seeking alternative income sources, which could be a response to macroeconomic conditions such as low bond yields or market uncertainty. On the other hand, the distribution rates presented raise questions about the economic sustainability of such high payouts and whether they can be maintained without eroding principal over time.

Investors should be aware of the broader economic context when considering these ETFs, including interest rate forecasts, market trends and the overall health of the economy. These factors can influence the performance of the underlying indices that the ETFs track and, by extension, the ability of the ETFs to generate the option income promised. Moreover, the role of these ETFs in a diversified portfolio should be evaluated in light of their potential risks and rewards, considering both the current economic environment and future market expectations.

MIAMI--(BUSINESS WIRE)-- Defiance ETFs, a pioneering force in the world of thematic and income-based exchange-traded funds (ETFs), is thrilled to announce a remarkable achievement as its three daily options (0DTE) income ETFs, JEPY, the Defiance S&P 500 Enhanced Option Income ETF, QQQY, the Defiance Nasdaq-100 Enhanced Option Income ETF, and IWMY, the R2000 Enhanced Options Income ETF have collectively amassed over $400 million in assets under management (AUM).

https://www.defianceetfs.com/ (Graphic: Business Wire)

JEPY, QQQY, and IWMY represent Defiance ETFs' commitment to providing investors with innovative income solutions in today's dynamic markets. JEPY focuses on the S&P 500, while QQQY offers enhanced income opportunities within the Nasdaq-100 Index, and IWMY offers enhanced income opportunities within the Russell 2000.

Monthly Distributions:
QQQY (60.52%)
JEPY (42.14%)
IWMY (71.95%)

Distribution as of 11/30/2023

ETF Ticker	Distribution per Share	Distribution Rate *	Ex-Date	Record Date	Payment Date
QQQY	$0.93	60.52%	12/1/2023	12/4/2023	12/6/2023
JEPY	$0.65	42.14%	12/1/2023	12/4/2023	12/6/2023
IWMY	$1.25	71.95%	12/1/2023	12/4/2023	12/6/2023

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: Defiance ETFs, founded in 2018, has emerged as a leading ETF issuer dedicated to income and thematic investing. The firm's actively managed options ETFs are designed to potentially enhance income for investors, with distributions paid on a monthly basis ¹

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.

¹ The funds intend to pay distributions, if any, on a monthly basis

As of 11-30-2023 the 30-Day SEC yield** for QQQY is 3.24%, JEPY is 3.15%, and IWMY is n/a

The Gross Expense Ratio for QQQY, JEPY, and IWMY is 0.99%

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.

An Investment in the Funds is not an investment in the Index, nor are the Funds an investment in a traditional passively managed index fund.

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 U.S.-based companies listed on the New York Stock Exchange or Nasdaq. These companies represent approximately 80% of the total U.S. equities market by capitalization, making it a large-cap index.

IWMY Index Overview: The Russell 2000 Index is a widely recognized benchmark index that tracks the performance of approximately 2000 small-cap companies in the United States. These are the smallest companies listed in the Russell 3000 Index, representing about 10% of that index’s total market capitalization.

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.

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 U.S. companies, is primarily exposed to overall economic and market conditions. Recession, inflation, and changes in interest rates can significantly impact the index’s performance. Furthermore, despite its diverse representation, a downturn in a major sector such as technology or financials could notably affect the index. Geopolitical risks and unexpected global events, like pandemics, can introduce volatility and uncertainty.

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 U.S. companies, is primarily exposed to overall economic and market conditions. Recession, inflation, and changes in interest rates can significantly impact the index’s performance. Furthermore, despite its diverse representation, a downturn in a major sector such as technology or financials could notably affect the index. Geopolitical risks and unexpected global events, like pandemics, can introduce volatility and uncertainty.

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/20231219873698/en/

Frank Taylor

(646) 808-3647

defiance@dlpr.com

Source: Defiance ETFs

FAQ

What is the latest achievement announced by Defiance ETFs?

Defiance ETFs, represented by JEPY, QQQY, and IWMY, have collectively amassed over $400 million in assets under management (AUM).

What are the monthly distributions for QQQY, JEPY, and IWMY?

QQQY has a distribution rate of 60.52%, JEPY has a distribution rate of 42.14%, and IWMY has a distribution rate of 71.95% as of 11/30/2023.

What are the inception dates for QQQY, JEPY, and IWMY?

QQQY's inception date is 9/13/2023, JEPY's inception date is 9/18/2023, and IWMY's inception date is 10/30/2023.