Roundhill Investments launched five new WeeklyPay ETFs, each aiming to deliver weekly dividends without sacrificing upside or using options.
The new additions include:
- Roundhill AMZN WeeklyPay ETF AMZW, following Amazon AMZN,
- Roundhill BRKB WeeklyPay ETF BRKW, following Berkshire Hathaway BRK,
- Roundhill HOOD WeeklyPay ETF HOOW, following Robinhood HOOD
- Roundhill META WeeklyPay ETF METW, following Meta Platforms META
- Roundhill NFLX WeeklyPay ETF NFLW, following Netflix NFLX
These launches bring the WeeklyPay family to 10 ETFs. Each fund aims to capture 120% of the aggregate return of its underlying security each calendar week, as well as a regular distribution.
That’s a clear divergence from the way most single-stock income ETFs operate, usually through selling covered calls, which exchange upside potential for option premiums. And with more than $15 billion flowing into such a strategy, the company obviously believes there is room for disruption.
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A Different Kind Of Income ETF
Instead of depending on derivatives, Roundhill’s WeeklyPay ETFs employ leverage to enhance returns, aiming at 1.2x the performance of the underlying stock on a weekly basis. That multiplier, naturally, involves risk, particularly in downward environments, but it also avoids having investors forego gains in a bull market, as with covered call strategies.
The money also makes weekly payments, which might be enticing for income-oriented investors tired of the slow dribble of dividends.
From Tech Giants To Meme Stocks
Roundhill’s current roster already boasts single-stock ETFs tied to such names as Apple AAPL, Nvidia NVDA, Tesla TSLA, and Palantir PLTR. But the company isn’t yet done.
It has applied for additional WeeklyPay ETFs tracking an eclectic roster: from blue chips such as Microsoft MSFT and Alphabet GOOGL, to semicon-weighty names such as AMD AMD and ASML Holding ASML, to speculative darlings such as Reddit RDDT, DraftKings DKNG, and MicroStrategy MSTR.
The message is plain: Roundhill is looking to track the entire gamut of investor demand—tech, momentum, income, and high-risk stocks—all under one umbrella.
What To Watch
While the structure has upside potential, it’s not without its cautionary tales. Leveraged exposure, even at a 1.2x rate, amplifies gains and losses as much as it amplifies the underlying. And while the absence of options sidesteps issues of premium decay and call-away risk, investors should still look at how distributions are made and what level of volatility to anticipate.
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