New YieldMax ETF Offers Income, Exposure to Apple Stock

Today, Toroso Investments, through its white-label business, rolled out another single-security exchange-traded fund from subadvisor ZEGA Financial that applies an options strategy to Apple stock.  

The YieldMax AAPL Option Income Strategy ETF (APLY) uses a synthetic covered call strategy to generate income along with providing exposure to the performance of the fund’s reference stock, though exposure to upside performance is reduced. 

The new fund has an expense ratio of 0.99% and lists on the NYSE Arca. 

APLY is actively managed, and provides monthly distributions and generates income through writing covered calls and investing in short-term U.S. Treasury debt. The fund holds a combination of regular options and flexible exchange options, its prospectus says.  

The YieldMax lineup already includes the YieldMax TSLA Option Income Strategy ETF (TSLY), which has Tesla stock as its reference asset, and the YieldMax Innovation Option Income Strategy ETF (OARK), which has the ARK Innovation ETF (ARKK) as its reference asset. Both funds use the same strategy as APLY. TSLY and OARK offer current yields of 66.03% and 39.01%, respectively, according to a press release. 

A filing indicates that the YieldMax lineup is expected to offer additional funds linked to the stocks of Amazon.com Inc., Berkshire Hathaway Inc., Coinbase Global Inc., Meta Platforms Inc., Alphabet Inc., Netflix Inc., Nvidia Corp. and Block Inc.  

Single-Security ETFs 

Single-security ETFs received a lot of attention last year. The first single-stock funds offering leveraged or inverse exposure to U.S.-listed securities debuted in July.  

Around the same time, F/m Investments launched its family of ETFs that invest solely in a single on-the-run Treasury security representing a particular tenor, and Innovator rolled out the Innovator Hedged TSLA Strategy ETF (TSLH), which offers hedged exposure to the performance of Tesla stock.  

While the products from F/m have done quite well, with the family expanding to 10 funds with assets totaling more than $1.2 billion, the single-security ETFs tied to equities have mostly languished, with a few notable exceptions, like the nearly $125 million AXS TSLA Bear Daily ETF (TSLQ). 

TSLY and OARK have assets under management of $34.4 million and $14.2 million, respectively.  

Contact Heather Bell at [email protected]