How Nicholas X Is Rewiring the Income ETF
In this episode of Behind the Ticker, David Nicholas of Nicholas X Funds explains how his firm uses a pick and shovel strategy that combines commodity exposure with industry equities and an active options overly to redefine income generation in silver, gold, crypto, and other thematics.
Behind the Ticker offers investors a chance to get under the hood of newer or more niche ETFs. Brad Roth, Managing Partner and CIO of Thor Financial Technologies, talks strategy and the human side of investing and ETFs with the individuals bringing these funds to market.
In this episode, Roth talks with David Nicholas, Founder and President of Nicholas Wealth Management. The firm launched the Nicholas Fixed Income Alternative ETF (FIAX) in the post-COVID recovery period. They followed up with the Nicholas Global Equity and Income ETF (GIAX) and have since expanded with several thematic offerings that include the Nicholas Crypto Income ETF (BLOX), and the newly launched Nicholas Gold Income ETF (GLDN) and Nicholas Silver Income ETF (SLVX), with more funds on the way.
You can also listen to this episode on Spotify, Apple Podcasts, or your preferred streaming platform. Want to watch this conversation instead? Go here.
Key Takeaways
- Background and Transition: David Nicholas transitioned from a 20-year career as a financial advisor to launching Nicholas X ETFs, utilizing his experience with insurance-based strategies to create liquid ETF products.
- Thematic Fund Structure: The firm’s thematic funds, such as those for silver (SLVX), gold (GLDN), and crypto (BLOX), use a "pick and shovel" approach by splitting exposure between the physical commodity and the companies within that industry’s ecosystem.
- Active Options Strategy: Nicholas X employs an active options overlay, primarily using put spreads and call spreads rather than traditional covered calls, to generate additional income while attempting to capture more market upside.
- Growth and Scaling: After initially launching one fund per year, the firm is currently in a rapid growth phase, reinvesting revenue to expand from three funds to nine to offer a more diverse suite of risk-defined products.
Discover the news, data, and voices shaping the ETF community. Follow along here.
Disclaimer: The market insights, projections, and investment strategies expressed in this article are solely those of the contributor and do not necessarily reflect the views or opinions of ETF.com This content is provided for informational purposes and does not constitute financial, investment, or legal advice.
