TLDR
- REX Shares launched GIF ETF, merging nine leveraged covered-call single-stock strategies into one income-focused investment vehicle
- Holdings include crypto-exposed stocks Coinbase and Strategy, alongside Nvidia, Tesla, Palantir, and other major companies
- The fund applies roughly 1.25x leverage to each equity holding while paying weekly dividends sourced from covered call premiums
- 21Shares launched a Strategy preferred stock ETP in Europe (STRC NA) on Euronext Amsterdam the same week
- Strategy holds the position of most-shorted large-cap U.S. stock according to Goldman Sachs data, with share prices down over 60% in six months
REX Shares, a U.S.-based investment management company, launched a novel exchange-traded fund trading under the GIF ticker this week. The offering merges nine leveraged single-stock covered-call strategies into one product designed to generate weekly dividend distributions for investors.
The fund maintains equal-weighted positions across nine REX single-stock ETFs. Each component ETF targets roughly 1.25x leveraged exposure to its underlying stock while executing covered call options to generate premium income.
Covered call strategies involve writing call options against stocks already owned in the portfolio. Option purchasers pay upfront premiums, generating instant revenue for the fund while capping upside potential if the underlying shares surge substantially.
GIF began trading on Cboe Global Markets. The nine stocks represented in the fund are Nvidia, Tesla, Strategy, Coinbase, Robinhood, Palantir, CoreWeave, Eli Lilly, and Walmart.
Coinbase and Strategy constitute the two cryptocurrency-related stocks in the mix. Other holdings span artificial intelligence, pharmaceutical, retail, and technology sectors.
Strategy, formerly known as MicroStrategy, operates as the world’s largest corporate holder of Bitcoin. The firm currently holds 717,722 BTC, accounting for approximately 3.4% of Bitcoin’s total 21 million coin supply cap.
Despite this massive Bitcoin treasury, Strategy’s stock performance has struggled significantly. Shares have plummeted more than 60% over the last six months and approximately 50% year-over-year, according to Yahoo Finance data.
Strategy also holds the dubious distinction of being the most heavily shorted large-cap U.S. stock per Goldman Sachs’ latest research, measured by short interest as a percentage of total market value.
Strategy-Linked Financial Products Gain Traction in Europe
The GIF launch coincided with heightened interest in Strategy-related investment products. Wednesday saw 21Shares introduce a new exchange-traded product providing European investors exposure to STRC, Strategy’s variable-rate perpetual preferred stock.
The 21Shares Strategy Yield ETP started trading on Euronext Amsterdam under the STRC NA ticker Thursday. Strategy describes STRC as a digital credit product delivering an 11.25% annual dividend yield.
This instrument is tied directly to Strategy’s Bitcoin holdings and forms part of the company’s broader push to develop fixed-income securities backed by its substantial BTC treasury.
Also Wednesday, both Prevalon Energy and Anchorage Digital announced they had allocated portions of their corporate treasuries to STRC investments. Neither company disclosed specific investment amounts.
How GIF ETF Distributions Work
Income produced by the GIF ETF comes from covered call premiums collected across all nine underlying funds. Each component ETF plans to distribute this income through weekly payment schedules.
The 1.25x leverage multiplier means the fund amplifies both gains and losses compared to owning the stocks outright. Investors forgo some upside potential in exchange for steady premium income generation.
REX Shares hasn’t disclosed an expected yield rate for GIF. Weekly distributions will vary depending on current market volatility conditions and options pricing factors.
