Does anyone just hold shares anymore ? The financial wizardry with these ETFs seems like it will all blow up at some point just like CDOs in 2009.
https://www.purposeinvest.com/funds/apple-yield-shares-purpose-etf?utm_campaign=apple&utm_source=bnn&utm_medium=banner&utm_content=takeover
Thomas
APLY owns AAPL shares, and sells call options and/or put options to enhance yield. Current yield is 7.88%, vs AAPL's dividend of 0.60%. We do not have any particular issues with the set up. Some investors are not comfortable with options, and if they are willing to pay a fee on an ETF to enhance yield then that is their choice. But, in addition to the fees, the ETF is fairly small ($12M) and the options only protect part of the downside risk of the stock. If AAPL collapses, this ETF is going to get hit also. Many investors may not understand the risks, and are only looking at the high yield. This, of course, is the problem here, but not really in the product itself. Upside potential can be capped by the call options as well. Many investors believe AAPL is a mature company and thus may not grow as fast anymore, which is a possibility of course. But we would rather own the stock directly.
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