REX Shares has launched a new actively managed exchange-traded fund (ETF) focused on generating income, targeting investors seeking yield. On February 26, the company introduced the GIF ETF on the Cboe BZX exchange. The fund bundles several leveraged covered-call strategies tied to a basket of stocks, including key crypto proxies, into a single product that distributes income weekly.
The fund operates as a fund-of-funds, investing in nine existing REX Shares Growth & Income ETFs. Each underlying ETF focuses on a single large-cap stock and employs an aggressive strategy, targeting roughly 1.25x notional exposure to its core company. Simultaneously, these funds sell covered calls on approximately half of the position to generate steady income from option premiums while retaining some upside potential.
At launch, the GIF ETF's underlying holdings include COII (tied to Coinbase) and MSII (tied to Strategy, formerly MicroStrategy). Other positions are NVII (Nvidia), TSII (Tesla), HOII (Robinhood), PLTI (Palantir), CWII (CoreWeave), LLII (Eli Lilly), and WMTI (Walmart). This combination provides exposure to cryptocurrency proxy stocks, AI and technology leaders, healthcare, and retail, aiming to reduce single-stock risk, though many components remain in high-volatility sectors.
A key selling point is the weekly income distribution, primarily derived from the covered-call premiums generated by the underlying ETFs. Recent data indicates a headline distribution rate exceeding 30%, though the more conservative 30-day SEC yield is significantly lower. Investors must consider costs, with the GIF ETF's gross expense ratio near 1.23%, plus indirect fees from the underlying funds.
The launch reflects a broader market trend where investors seek yield products linked to volatile crypto and technology growth themes. Initial online reactions show enthusiasm for the simplified access, though experienced traders warn that the leveraged, options-based strategy carries amplified risks and can limit gains during strong rallies. REX Shares rebalances the portfolio monthly to maintain equal position weighting, and the structure allows for automatic expansion as new REX Shares Growth & Income ETFs are launched.
