Dividend Investing Ideas Center
Critical Facts You Need to Know About Preferred Stocks
Have you ever wished for the safety of bonds, but the return potential...
Name
As of 10/28/2024Price
Aum/Mkt Cap
YIELD
Exp Ratio
Watchlist
YTD Return
17.1%
1 yr return
27.8%
3 Yr Avg Return
2.0%
5 Yr Avg Return
N/A
Net Assets
$43.4 M
Holdings in Top 10
100.0%
Expense Ratio 1.00%
Front Load N/A
Deferred Load N/A
Turnover N/A
Redemption Fee N/A
Standard (Taxable)
N/A
IRA
N/A
Fund Type
Exchange Traded Fund
Name
As of 10/28/2024Price
Aum/Mkt Cap
YIELD
Exp Ratio
Watchlist
The Fund is an actively-managed exchange-traded fund (“ETF”) that seeks to provide exposure to the U.S. large capitalization equity market, while mitigating overall market downside risk in the event of a major market decline. To achieve its investment objective, the Fund invests in a combination of options, as well as fixed income securities, or other income producing securities, including preferred shares, through ETFs or other investment companies or through direct investments.
In pursuing the Fund’s investment objective, ZEGA Financial, LLC (“ZEGA” or the “Sub-Adviser”), the Fund’s investment sub-adviser, seeks to achieve exposure to the performance of the U.S. large capitalization equity market, generally recognized as the S&P 500® Index (the “S&P 500”), through call index options, call options on the SPDR S&P 500 ETF Trust (“SPY”) or other ETFs that track the S&P 500, and FLexible EXchange® Options (“FLEX Options”) (collectively, “S&P 500 options”). The Fund’s S&P 500 option positions will represent 100% notional exposure to the S&P 500.
An option gives the purchaser of the option the right to purchase (for a call option) or sell (for a put option) the underlying asset (or deliver cash equal to the value of an underlying index) at a specified price (“strike price”). In the event the underlying asset declines in value, the value of a call option will generally decrease (and may end up worthless) and the value of a put option will generally increase. In the event the underlying asset appreciates in value, the value of a call option will generally increase and the value of a put option will generally decrease (and may end up worthless). FLEX Options are customizable exchange-traded option contracts guaranteed for settlement by the Options Clearing Corporation (“OCC”).
The Sub-Adviser may “ladder” the Fund’s S&P 500 option positions. “Laddering” is an investment technique that utilizes multiple option positions over multiple expiration dates, to avoid the risk of reinvesting a large portion of assets in an unfavorable financial environment, as well as creating more opportunities to roll hedges and secure gains during extended periods of market appreciation. The Sub-Adviser will ladder the Fund’s S&P 500 option positions by investing in options with multiple expiration dates over a 12-month period using at least two intervals or “rungs.” By regularly rebuilding each ladder rung as options expire the Sub-Adviser will seek to achieve additional equity exposure as markets experience reduced prices (essentially buying on dips), or realize gains as market prices increase and as hedged positions are reestablished at higher levels.
The Fund may invest significantly in fixed income and other income producing securities through ETFs or other investment companies, or through direct investments. The Fund’s fixed income investments may include below investment grade debt securities (often referred to as “high yield” or “junk” bonds). The Fund’s fixed income investments aim to generate income as a means of offsetting expenses associated with the cost of purchasing options. The Fund may purchase put options as a means of hedging to provide downside protection on the underlying holdings in the income portion of the Fund’s portfolio.
The Fund also seeks to produce income by selling out-of-the-money call options. A call option is considered “out-of-the-money” when the strike price of the option at expiration exceeds the current price of the underlying asset. The Fund will only sell call options that are either covered by the underlying asset held in the Fund’s portfolio (also known as covered call selling) or by corresponding purchased call options held in the Fund’s portfolio (also known as a long call spread).
The Fund’s option positions are determined by the Sub-Adviser based on underlying quantitative metrics, including open interest, depth of expirations, number of strike prices, implied volatility, bid/ask spread width and cost. Open interest and bid/ask spread width are indicators of the liquidity of an option position and likelihood of efficient price execution. Implied volatility is an indicator of how expensive an option is relative to other options and relative to historical ranges. In general, as volatility rises option premiums will also rise making an option more expensive. A greater number of strike prices and expirations generally gives the Sub-Adviser more flexibility when choosing levels and length of protection. The Sub-Adviser analyzes such metrics to determine the Fund portfolio’s ability to mitigate market risk while generating returns.
The Sub-Adviser makes buy and sell decisions for the Fund based on a set of defined rules established by the Sub-Adviser’s investment committee, including proprietary quantitative models as well as information and data supplied by third parties (“Models and Data”), which may be revised from time to time. With regard to buy and sell decisions, the Sub-Adviser’s investment committee considers option data and probabilities, along with the ability to manage the risk of a position. For fixed income investments, the investment committee assesses a position’s ability to have a viable hedge that limits risk while producing desired revenue. For S&P 500 options, the investment committee typically adds new purchased call options to the Fund’s portfolio when the market value of the S&P 500 materially declines. When new call options are purchased during market declines, the Sub-Adviser still intends to limit the Fund’s S&P 500 option positions to only approximately 8-10% of the Fund’s portfolio over a 12-month period. When the market value of the S&P 500 appreciates, the S&P 500 options generally increase in value. If the value of the Fund’s S&P 500 options materially exceed the 8-10% target, the Sub-Adviser will simultaneously sell the S&P 500 options with higher market values in the Fund’s portfolio and purchase new S&P 500 options that have a lower premium to bring the Fund’s S&P 500 options holdings in-line with the 8-10% target.
By using a combination of options and fixed income positions, the Sub-Adviser seeks to limit the loss exposure of Fund portfolio holdings. The Fund’s notional exposure to the S&P 500 with options will represent 100% of the Fund’s portfolio. This limitation may be done by using put options for protection or restricting the amount spent on long calls. The Fund aims to restrict exposure to major declines in the market value of the S&P 500 as the most a purchased call option can lose is the amount paid for the call (also known as the premium). As a result, the Sub-Adviser seeks to limit the level of exposure to loss with respect to that portion of the Fund’s portfolio holding S&P 500 options to 8-10% over any 12-month period. The portion of the Fund’s portfolio holding S&P 500 options may experience a loss of more than 8-10% in a single month or quarter; however, over the prior 12-month period the Sub-Adviser’s strategy aims to limit losses within the 8-10% target range. During periods where the market value of the S&P 500 experiences multiple years of double-digit losses, the portion of the Fund’s portfolio holding S&P 500 options may experience losses of 8-10% in consecutive 12-month periods.
The portion of the Fund’s portfolio holding fixed income investments also has risk of loss exposure. The Sub-Adviser may hedge this risk of loss exposure by purchasing put options that are directly correlated to the underlying fixed income investments held in the Fund’s portfolio. The underlying fixed income investments held in the Fund’s portfolio may experience losses, but the Sub-Adviser seeks to limit those losses to 10% through the Fund’s investments in purchased put options.
The Fund may simultaneously experience losses in both its S&P 500 option positions and fixed income investments. This may result in the Fund’s total portfolio experiencing losses in excess of the 8-10% target range over a 12-month period.
There are costs associated with the Sub-Adviser’s options hedging strategy and the Fund typically experiences such costs in the form of option time decay. Option time decay is a measure of the rate of decline in the value of an option contract due to the passage of time. The cost of the Fund’s S&P 500 options can limit the Fund’s ability to achieve returns equal to the gains experienced by the S&P 500.
Period | ZHDG Return | Category Return Low | Category Return High | Rank in Category (%) |
---|---|---|---|---|
YTD | 17.1% | -72.1% | 44.1% | N/A |
1 Yr | 27.8% | 5.6% | 73.4% | N/A |
3 Yr | 2.0%* | -2.4% | 25.0% | N/A |
5 Yr | N/A* | 3.5% | 26.8% | N/A |
10 Yr | N/A* | 4.3% | 17.8% | N/A |
* Annualized
Period | ZHDG Return | Category Return Low | Category Return High | Rank in Category (%) |
---|---|---|---|---|
2023 | 11.4% | -94.0% | 2181.7% | N/A |
2022 | -24.8% | -22.7% | 41.1% | N/A |
2021 | N/A | -100.0% | 4.6% | N/A |
2020 | N/A | -100.0% | 33.2% | N/A |
2019 | N/A | -44.8% | 25.0% | N/A |
Period | ZHDG Return | Category Return Low | Category Return High | Rank in Category (%) |
---|---|---|---|---|
YTD | 17.1% | -71.7% | 44.1% | N/A |
1 Yr | 27.8% | 5.6% | 73.4% | N/A |
3 Yr | 2.0%* | -2.4% | 26.2% | N/A |
5 Yr | N/A* | 3.5% | 26.8% | N/A |
10 Yr | N/A* | 4.3% | 17.8% | N/A |
* Annualized
Period | ZHDG Return | Category Return Low | Category Return High | Rank in Category (%) |
---|---|---|---|---|
2023 | 13.1% | -94.0% | 2181.7% | N/A |
2022 | -22.1% | -21.6% | 41.1% | N/A |
2021 | N/A | -100.0% | 8.2% | N/A |
2020 | N/A | -100.0% | 33.2% | N/A |
2019 | N/A | -13.4% | 26.8% | N/A |
ZHDG | Category Low | Category High | ZHDG % Rank | |
---|---|---|---|---|
Net Assets | 43.4 M | 503 K | 1.31 T | 83.13% |
Number of Holdings | 10 | 2 | 3980 | 59.51% |
Net Assets in Top 10 | 34.1 M | -472 M | 306 B | 70.02% |
Weighting of Top 10 | 99.98% | 2.0% | 100.0% | 60.08% |
Weighting | Return Low | Return High | ZHDG % Rank | |
---|---|---|---|---|
Other | 68.23% | -15.82% | 100.00% | 86.86% |
Bonds | 29.79% | 0.00% | 87.09% | 0.11% |
Cash | 1.97% | -93.93% | 50.07% | 6.21% |
Stocks | 0.00% | 0.00% | 139.05% | 99.94% |
Preferred Stocks | 0.00% | 0.00% | 3.21% | 88.42% |
Convertible Bonds | 0.00% | 0.00% | 8.52% | 87.64% |
Weighting | Return Low | Return High | ZHDG % Rank | |
---|---|---|---|---|
Derivative | 68.23% | 0.00% | 62.47% | 86.11% |
Cash & Equivalents | 1.95% | 0.00% | 100.00% | 98.62% |
Securitized | 0.00% | 0.00% | 50.96% | 85.90% |
Corporate | 0.00% | 0.00% | 100.00% | 0.96% |
Municipal | 0.00% | 0.00% | 2.33% | 85.63% |
Government | 0.00% | 0.00% | 100.00% | 86.45% |
Weighting | Return Low | Return High | ZHDG % Rank | |
---|---|---|---|---|
US | 29.79% | -0.33% | 82.05% | 0.06% |
Non US | 0.00% | 0.00% | 42.71% | 1.29% |
ZHDG Fees (% of AUM) | Category Return Low | Category Return High | Rank in Category (%) | |
---|---|---|---|---|
Expense Ratio | 1.00% | 0.01% | 4.53% | 26.12% |
Management Fee | 0.95% | 0.00% | 2.00% | 93.57% |
12b-1 Fee | N/A | 0.00% | 1.00% | 21.43% |
Administrative Fee | N/A | 0.00% | 0.95% | N/A |
ZHDG Fees (% of AUM) | Category Return Low | Category Return High | Rank in Category (%) | |
---|---|---|---|---|
Front Load | N/A | 0.00% | 5.75% | N/A |
Deferred Load | N/A | 1.00% | 5.00% | N/A |
ZHDG Fees (% of AUM) | Category Return Low | Category Return High | Rank in Category (%) | |
---|---|---|---|---|
Max Redemption Fee | N/A | 0.25% | 2.00% | N/A |
Turnover provides investors a proxy for the trading fees incurred by mutual fund managers who frequently adjust position allocations. Higher turnover means higher trading fees.
ZHDG Fees (% of AUM) | Category Return Low | Category Return High | Rank in Category (%) | |
---|---|---|---|---|
Turnover | N/A | 0.00% | 363.00% | N/A |
ZHDG | Category Low | Category High | ZHDG % Rank | |
---|---|---|---|---|
Dividend Yield | 1.30% | 0.00% | 1.97% | 88.43% |
ZHDG | Category Low | Category High | Category Mod | |
---|---|---|---|---|
Dividend Distribution Frequency | Annual | Annually | Monthly | Monthly |
ZHDG | Category Low | Category High | ZHDG % Rank | |
---|---|---|---|---|
Net Income Ratio | N/A | -2.09% | 2.65% | N/A |
ZHDG | Category Low | Category High | Capital Mode | |
---|---|---|---|---|
Capital Gain Distribution Frequency |
Date | Amount | Type |
---|---|---|
Dec 22, 2023 | $0.269 | OrdinaryDividend |
Dec 23, 2022 | $0.567 | OrdinaryDividend |
Dec 22, 2021 | $0.280 | OrdinaryDividend |
Start Date
Tenure
Tenure Rank
Jul 06, 2021
0.9
0.9%
Mr. Ragauss currently serves as Director of Product Management at CSat Investment Advisory, having joined the it in April 2016. Prior to joiningCSat Investment Advisory, Mr. Ragauss was Assistant Vice President at Huntington National Bank (“Huntington”), where he was Product Manager for the Huntington Funds and Huntington Strategy Shares ETFs, a combined fund complex of almost $4 billion in assets under management. At Huntington, he led ETF development bringing to market some of the first actively managed ETFs. Mr. Ragauss joined Huntington in 2010. Mr. Ragauss attended Grand Valley State University where he received his Bachelor of Business Administration in Finance and International Business, as well as a minor in French. He is a member of both the National and West Michigan CFA societies and holds the CFA designation.
Start Date
Tenure
Tenure Rank
Jul 06, 2021
0.9
0.9%
Mr. Venuto is a co-founder and has been the Chief Investment Officer of the Toroso Investments, LLC since 2012. Mr. Venuto is an ETF industry veteran with over a decade of experience in the design and implementation of ETF-based investment strategies. Previously, he was Head of Investments at Global X Funds where he provided portfolio optimization services to institutional clients. Before that, he was Senior Vice President at Horizon Kinetics where his responsibilities included new business development, investment strategy and client and strategic initiatives.
Start Date
Tenure
Tenure Rank
Jul 06, 2021
0.9
0.9%
Jay has been an investment manager at ZEGA since its inception and is actively involved in all of ZEGA’s investment strategies ZEGA’s founding principles grew out of the book Jay co-authored with Wayne Ferbert, entitled Buy and Hedge, the Five Iron Rules for Investing Over the Long Term. Jay has over 20 years of experience in business management, with 12 years in the online brokerage field with TD Ameritrade and Datek Online. As the manager of the Active Trading business at TD Ameritrade, Jay helped drive it to become #1 in trade volume among U.S. brokers. Jay has been a regular contributor on CNBC’s Fast Money, has provided video interviews for CNN, and is quoted regularly in publications such as The Wall Street Journal and Smart Money. Jay resides in West Palm Beach, Florida with his wife and son.
Start Date
Tenure
Tenure Rank
Jul 06, 2021
0.9
0.9%
As the product families at ZEGA grew, Mick joined the firm to tackle two roles. The first focuses on trading execution and support. The second examines, and helps to refine, investment strategies as they move from the incubation stage to broader distribution among clients. Mick brings a product manager’s sensibility and methodology to his work, having performed this role most recently at Bank of the West and for a more extended run at TD Ameritrade. In his 15+ years at the online broker, he oversaw myriad changes in a rapidly growing industry.
Category Low | Category High | Category Average | Category Mode |
---|---|---|---|
0.01 | 38.28 | 6.55 | 1.67 |
Dividend Investing Ideas Center
Have you ever wished for the safety of bonds, but the return potential...
Dividend Investing Ideas Center
If you are reaching retirement age, there is a good chance that you...
Dividend Investing Ideas Center
If you are reaching retirement age, there is a good chance that you...