YieldMax Releases Gold Miners ETF With Options Strategy

GDXY is actively managed and has a net expense ratio of 0.99%. The fund aims to provide current income to investors.

In order to accomplish the fund’s goals, GDXY utilizes a synthetic covered call strategy on the VanEck Gold Miners ETF (GDX B+). YieldMax notes that the fund does not directly invest in GDX.

GDX primarily invests in major gold mining companies across the globe. Through doing so, the fund provides indirect exposure to the current state of gold prices. Along with the benefits of gold demand, the fund gives investors access to the relatively under-owned materials sector.

See More: ETF of the Week: VanEck Gold Miners ETF

Through the use of a covered call strategy, GDXY can give investors indirect exposure to the price returns present in FDX. The fund prospectus notes that the call strategy will be applied regardless of the current economic and market conditions. In doing so, GDXY does not intend to employ defensive strategies amid market turbulence.

To synthetically replicate the movements of GDX, GDXY utilizes a number of investment instruments. The fund will buy call options on GDX while simultaneously selling put options on the fund to curate synthetic long exposure.

Additionally, GDXY writes call options on GDX to provide income. Due to the fund not directly owning GFX, these call options will be sold short. As a means to provide collateral, GDXY will also hold short-term U.S. Treasury securities.

With this unique strategy, GDXY can be a valuable portfolio option for investors who want exposure to GDX and gold miners, while still desiring monthly income. This monthly income is bolstered by the investment in short-term U.S. Treasury securities, ensuring distributions aren’t solely tied to GDX options.

GDXY is among the over 20 YieldMax ETFs that are currently listed in the United States. These funds represent over $2.7 billion in AUM.

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