REX Launches 3 New Growth & Income Covered Call ETFs
- REX Financial has debuted three covered call ETFs targeting COIN, MSTR and TSLA with 1.25x exposure.
- The funds split portfolios between covered call income generation and uncapped upside potential.
- The launch follows the recent introduction of a similar NVDA-focused fund last week.
REX Financial launched three new covered call exchange-traded funds targeting individual stocks, expanding its “Growth & Income Covered Call ETF” suite with products focused on high-growth companies, according to a Wednesday company announcement.
The new funds represent REX's strategy to meet rising investor demand for income-generating products tied to transformative growth themes, offering investors a way to capture upside in volatile stocks while generating weekly income through options strategies, according to the announcement.
COII, MSII & TSII Build on Momentum
The REX COIN Growth & Income ETF (COII), the REX MSTR Growth & Income ETF (MSII) and the REX TSLA Growth & Income ETF (TSII) each launched June 4 with $500,000 in initial assets, according to REX Financial. The products join the recently launched REX NVDA Growth & Income ETF (NVII), which debuted last week, according to the announcement.
Each fund targets 1.25x exposure to its underlying stock—Coinbase Global Inc. (COIN), Strategy Inc. (MSTR) or Tesla, Inc. (TSLA)—while generating weekly income through call options on approximately half the portfolio, according to REX Financial. The strategy provides uncapped upside potential on the remaining portion while monetizing volatility to produce income, the company stated.
The expansion "builds on the momentum of NVII" and offers investors a way to capture the upside of transformative companies while generating weekly income, said Scott Acheychek, chief operating officer of REX Financial, in the announcement.
Dual Portfolio Strategy
The funds employ a split approach where call options are written on half the portfolio to generate weekly income by capturing elevated volatility, while the other half remains fully exposed to preserve upside potential during market rallies, according to their fact sheets.
Each fund carries a 0.99% gross expense ratio and targets daily investment results between 105% and 150% of the underlying stock's daily percentage change, according to REX Financial. The actual leverage may range between 1.05x and 1.5x in accordance with investment objectives.
The funds rebalance daily to maintain target leverage exposure and use FLEX options contracts for customization features, according to the firm. REX Financial distributes the funds through Foreside Fund Services, with trading available on the CBOE exchange.