Quick Read
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Three Roundhill ETFs deliver weekly distribution rates between 25% and 45%.
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XDTE’s daily options strategy generates a 25% distribution rate tied to S&P 500 volatility, making it the most stable of the three weekly payers.
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TSLW pairs a 44.5% weekly yield with 1.2x leverage on Tesla, but shares have already shed 28% year to date.
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For those seeking passive income with more frequent, supercharged payments, there’s a slate of Roundhill ETFs to choose from. Indeed, there are quite a few products to browse through as weekly income becomes the “new” monthly income. In this piece, we’ll check in on a trio of Roundhill ETFs that are well-suited to investors who’d much rather get paid weekly (more often than biweekly paychecks) and are willing to forgo share price appreciation.
Indeed, one of the major things to look for with such Roundhill weekly payers is the capped upside and the potential for considerable downside. For investors willing to accept those risks as well as the expense ratio, which, as you’d guess, is considerably higher than a simpler, plain old vanilla index ETF that pays monthly or quarterly, the following three are definitely worth a look.
Roundhill Bitcoin Covered Call Strategy ETF
The Roundhill Bitcoin Covered Call Strategy ETF (YBTC) is a fantastic way to bet on an asset that would be otherwise unproductive, just sitting there and moving wildly. Indeed, Bitcoin (CRYPTO:BTC) isn’t going to be for everyone, especially with prices under pressure.
While it’s hard to tell what’s up next for Bitcoin, especially as the disruptive impact of quantum computers is factored in (could Bitcoin be at risk once Q-Day finally does happen?), I do find the Roundhill Bitcoin Covered Call Strategy ETF to be one of the better ways to play the asset class. Of course, there’s no free lunch or magic here.
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The incredible 41.6% distribution rate is towering, but, of course, the shares are down more than 42% year to date or over 63% in the past full year. Indeed, it’s been tough sledding for Bitcoin, and holders of instruments tied to it have been under pressure.
If you’re a passive income investor who firmly believes in the future of Bitcoin and seeks a way to profit from the virtually guaranteed volatility and trading activity in the crypto, the Roundhill Bitcoin Covered Call Strategy ETF might be the play. For the income-hungry, this ETF might be a great fit for an otherwise diversified portfolio.
Roundhill S&P 500 0DTE Covered Call Strategy ETF
The Roundhill S&P 500 0DTE Covered Call Strategy ETF (XDTE) is a covered call ETF that I think is easier to get behind. It offers a steadier ride than one tied to Bitcoin, the stock market, or a single stock.
With options sold daily, the ETF is quite labor-intensive, which, in my view, more than justifies the 0.97% gross expense ratio. With a high speculative appetite across markets, I do think that this ETF could be a way to profit from the other side.
With a nice 25.0% distribution rate and shares that don’t have such explosive negative momentum, the Roundhill S&P 0DTE Covered Call Strategy ETF might be the most intriguing play as the S&P 500 starts getting choppier as the AI trade heats up (or maybe looks to cool off) for summer, while the Fed considers its next big move — one that’s sure to move markets.
Roundhill TSLA WeeklyPay ETF
Finally, we have the Roundhill TSLA WeeklyPay ETF (TSLW), which is a way to play Tesla (NASDAQ:TSLA) stock on the income side. If you can’t get enough of the company, but aren’t happy with the lack of dividend on Tesla shares, this ETF might seem like a stellar bet.
With modest 1.2x (120%) leverage and sizeable distribution paid weekly, the ETF looks like a great fit for the income-craving Elon Musk fans who view the shares as overdue for an upside surge. Even though 1.2x leverage is mild and manageable, it’s still leverage, so do understand what one stands to gain and lose.
While the 44.5% distribution rate is enticing, the shares themselves will take investors on a wild ride. Year-to-date, they’re down about 28%. If you’re in the target audience (Tesla bulls hungry for massive passive income), the name might make sense to trade, especially now that Tesla isn’t the only Elon Musk-led company that investors can get a piece of in public markets.
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