TappAlpha Announces Three-Month Distribution for TappAlpha SPY Growth & Daily Income ETF (TSPY)

Rhea-AI Summary

TappAlpha announced a three-month distribution milestone for its TappAlpha SPY Growth & Daily Income ETF (TSPY). The distribution amount is $0.29391 per share, with a distribution rate of 13.54% as of December 5, 2024. The 30-day SEC yield is 0.57% as of the same date. Key dates include an ex-date of December 4, 2024, and a payable date of December 5, 2024.

Since its launch on August 15, 2024, TSPY has provided consistent monthly distributions. It uses a 0DTE (zero days to expiration) covered call strategy on SPY shares to generate income while allowing for growth opportunities. The fund has an expense ratio of 0.68% and net assets totaling $9,378,972 as of December 4, 2024. TappAlpha's innovative approach aims to enhance income through daily active management, making TSPY a compelling option for income-focused investors.

Positive

• Three-month distribution milestone for TSPY.
• Distribution amount of $0.29391 per share.
• Distribution rate of 13.54% as of December 5, 2024.
• Consistent monthly distributions since August 15, 2024.
• Innovative 0DTE covered call strategy.
• Expense ratio of 0.68%.
• Net assets of $9,378,972 as of December 4, 2024.

Negative

• None.

Insights

Financial Analyst

The TappAlpha SPY Growth & Daily Income ETF's latest distribution reflects a notable 13.54% distribution rate, though the more conservative 30-day SEC yield stands at just 0.57%. With $9.3 million in assets, this relatively new ETF employs a sophisticated 0DTE covered call strategy on SPY, presenting an intriguing income-generation approach. The $0.29391 per share distribution demonstrates the fund's ability to execute its strategy, though investors should note the significant 0.68% expense ratio, which is relatively high compared to passive index funds. The substantial difference between the distribution rate and SEC yield warrants careful consideration, as it may indicate that some distributions could include return of capital rather than pure income. This actively managed approach offers a unique value proposition but requires careful evaluation of the sustainability of its distribution strategy.

Market Research Analyst

The ETF's innovative approach to combining growth potential with daily income through 0DTE options strategies represents a distinctive offering in the increasingly crowded income ETF space. While the fund is still in its early stages since its August 2024 launch, the consistent monthly distributions demonstrate operational execution. However, the modest asset base of $9.3 million indicates it's still gaining traction with investors. The high distribution rate of 13.54% may attract income-seeking investors, but the substantial gap with the SEC yield suggests potential sustainability concerns. The daily active management approach, while potentially beneficial for optimization, contributes to the higher expense ratio which could impact long-term returns. This product fills a specific niche for sophisticated investors seeking alternative income strategies with growth potential.

SEATTLE--(BUSINESS WIRE)-- TappAlpha, a fintech company dedicated to making advanced investing accessible, today announced its three-month distribution milestone for the TappAlpha SPY Growth & Daily Income ETF (NASDAQ: TSPY).

(Graphic: Business Wire)

Distribution Amount: $0.29391 per share
Distribution Rate (as of 12/5/24): 13.54%
30-day SEC Yield (as of 12/5/24): 0.57%

Ex-Date - Wednesday, 12/4/2024
Payable Date - Thursday, 12/5/2024

Since its launch on August 15, 2024, TSPY has consistently provided monthly distributions, reflecting a commitment to delivering income alongside the potential for market-like growth. The fund employs a 0DTE (zero days to expiration) covered call strategy on SPY shares, aiming to generate income without sacrificing growth opportunities.

With an expense ratio of 0.68% and $9,378,972 in net assets as of 12/4/2024, TSPY stands out for its innovative approach to enhancing income through daily active management, offering a compelling solution for income-focused investors.

To learn more about TappAlpha and TSPY, please visit TappAlphaFunds.com.

About TappAlpha

Founded in 2023, TappAlpha is a Seattle-based fintech company committed to making advanced financial tools and education accessible to everyone. By making investing simple, actionable, and transparent, TappAlpha seeks to enable users to unlock potential income and achieve their financial goals. The company is built on a foundation of empathy and trust, ensuring a customer-first approach in all its initiatives.

Disclosures

For prospectus, click here: TSPY Prospectus

The Fund’s shares will change in value, and you could lose money by investing in the Fund. The Fund may not achieve its investment objectives. The Fund invests in options contracts that are based on the value of the Index, including SPX and XSP options. This subjects the Fund to certain of the same risks as if it owned shares of companies that comprised the Index, even though it does not own shares of companies in the Index. The Fund will have exposure to declines in the Index. The Fund is subject to potential losses if the Index loses value, which may not be offset by income received by the Fund. By virtue of the Fund’s investments in options contracts that are based on the value of the Index, the Fund may also be subject to an indirect investment risk, an index trading risk & an S&P 500 Index Risk.

Due to the short time until their expiration, 0DTE options are more sensitive to sudden price movements and market volatility than options with more time until expiration. Because of this, the timing of trades utilizing 0DTE options becomes more critical. Even a slight delay in the execution of 0DTE trades can significantly impact the outcome of the trade. 0DTE options may also suffer from low liquidity, making it more difficult for the Fund to enter into its positions each morning at desired prices. The bid-ask spreads on 0DTE options can be wider than with traditional options, increasing the Fund's transaction costs and negatively affecting its returns. These risks may negatively impact the performance of the fund.

The Distribution Rate is the annual rate an investor would receive if the most recent fund distribution remained the same going forward. The Distribution Rate represents a single distribution from the Fund and is not a representation of the Fund's total return. The Distribution Rate is calculated by multiplying the most recent distribution by 12 in order to annualize it, and then dividing by the Fund's NAV.

30-day SEC Yield is based on a formula mandated by the Securities and Exchange Commission (SEC) that calculates a fund's hypothetical annualized income, as a percentage of its assets. A security's income, for the purposes of this calculation, is based on the current market yield to maturity (in the case of bonds) or projected dividend yield (for stocks) of the fund's holdings over a trailing 30-day period. This hypothetical income will differ (at times, significantly) from the fund's actual experience; as a result, income distributions from the fund may be higher or lower than implied by the SEC yield.

Return of Capital (ROC) refers to a portion of a distribution that an ETF, mutual fund, or other investment may pay to investors that comes from the original principal (or initial investment) rather than from earnings, profits, or capital gains. The return of capital for this most recent distribution was estimated to be 100%.

A final determination of the tax character of distributions paid by the Funds will not be known until the completion of the Funds’ fiscal year and there can be no assurance as to the portions of each Fund’s distributions that will constitute return of capital and/or dividend income. The final determination of the tax character of distributions paid by the Funds in 2024 will be reported to shareholders in January 2025 on Form 1099-DIV.

Investing in securities involves risk including the loss of principal.

Distributed by Foreside Fund Services, LLC, Member FINRA.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241205296964/en/

For media inquiries:

Gregory FCA for TappAlpha

TappAlpha@gregoryfca.com

Source: TappAlpha

FAQ

What is the distribution amount for TSPY?

The distribution amount for TSPY is $0.29391 per share.

What is the distribution rate for TSPY as of December 5, 2024?

The distribution rate for TSPY is 13.54% as of December 5, 2024.

What is the 30-day SEC yield for TSPY?

The 30-day SEC yield for TSPY is 0.57% as of December 5, 2024.

When is the ex-date for TSPY's distribution?

The ex-date for TSPY's distribution is December 4, 2024.

When is the payable date for TSPY's distribution?

The payable date for TSPY's distribution is December 5, 2024.

What is the expense ratio for TSPY?

The expense ratio for TSPY is 0.68%.

What are the net assets of TSPY as of December 4, 2024?

The net assets of TSPY are $9,378,972 as of December 4, 2024.

What strategy does TSPY use to generate income?

TSPY uses a 0DTE (zero days to expiration) covered call strategy on SPY shares to generate income.