Odds & Ends: Single-Security Options ETFs Debut

Plus, a clutch of exchange-traded funds ceased to trade during the holiday week.

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Reviewed by: Heather Bell
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Edited by: Heather Bell

Although it was a shortened holiday week, the exchange-traded fund industry still managed to pack some developments into the days leading up to the holiday.  

Among the launches were two offerings from a new brand in the space, YieldMax. A pair of funds advised by Toroso Investments and subadvised by ZEGA Financial debuted that target individual securities. The YieldMax ARKK Option Income Strategy ETF (OARK) and the YieldMax TSLA Option Income Strategy ETF (TSLY) seek current income as their main objective via options strategies centered around the $7.3 billion ARK Innovation ETF (ARKK) and the stock of Tesla Inc., respectively. 

The funds look to provide exposure to the price returns of their targeted securities and income from options premiums. The exposure to the positive performance of the targeted securities, however, will be limited due to the nature of covered call strategies, which the funds implement through synthetic means. The funds also both hold U.S. Treasury securities for collateral, and will offer investors monthly distributions, according to the prospectuses.  

OARK and TSLY have expense ratios of 0.99% and list on the NYSE Arca. 

Closures 

Five funds completed closures during the week. Merlyn.AI shuttered two of its four ETFs as of Wednesday, closing down the Merlyn.AI Best-of-Breed Core Momentum ETF (BOB) and the Merlyn.AI Tactical Growth and Income ETF (SNUG). Meanwhile, the ETF Managers Group’s ETFMG 2x Daily Inverse Alternative Harvest ETF (MJIN) also saw its last day of trading at the same time after having launched a little more than a year ago. 

Earlier in the week, on Tuesday, Vanguard completed its first ETF closure ever, as the Vanguard U.S. Liquidity Factor ETF (VFLQ) finished its last day of trading. Just the day before, the Genuine investors ETF (GCIG) ceased to trade after the market close; like MJIN, the fund had launched roughly a year ago. 

Also during the week, Invesco announced the impending closure of another one of its target-maturity bond funds. The Invesco BulletShares 2022 USD Emerging Markets Debt ETF (BSBE) will cease to trade after the close of business on Dec. 15, once it has reached its maturity.  

Share Splits 

A number of share splits are also pending. The MicroSectors ETNs, the MicroSectors U.S. Big Oil Index -3X Inverse Leveraged ETN (NRGD) and the MicroSectors Oil & Gas Exploration & Production -3X Inverse Leveraged ETN (OILD)  are expected to undergo 1-for-10 reverse splits as of Dec. 2. Both ETNs have been deep in the red over the past 12 months, as they offer triple inverse exposure to portions of the energy sector. Funds can be forced to stop trading if their share prices get too low.  

Another eight Global X ETFs that are fairly deep in negative territory over the past 12 months will undergo reverse splits as well, as of Dec. 19. The Global X Blockchain & Bitcoin Strategy ETF (BITS) and the Global X Blockchain ETF (BKCH) will both have 1-for-4 splits, while the following ETFs will undergo 1-for-3 splits: 

 

Contact Heather Bell at [email protected] 

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.