Undercovered Dozen ETF Edition: Covered Call Funds, Small-Cap Value, Leveraged ETFs, Japan +

seekingalpha08-16

The Undercovered Dozen series highlights less-covered tickers on Seeking Alpha as another source of idea generation. This is our second edition focused on 12 ETF ideas from the last month.We take a ...

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This is our second edition focused on 12 ETF ideas from the last month.We take a ...</p>\n\n<a href=\"https://seekingalpha.com/article/4714923-undercovered-dozen-etf-edition-covered-call-funds-small-cap-value-leveraged-etfs-japan-plus\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Undercovered Dozen ETF Edition: Covered Call Funds, Small-Cap Value, Leveraged ETFs, Japan +</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nUndercovered Dozen ETF Edition: Covered Call Funds, Small-Cap Value, Leveraged ETFs, Japan +\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-16 03:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4714923-undercovered-dozen-etf-edition-covered-call-funds-small-cap-value-leveraged-etfs-japan-plus><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The Undercovered Dozen series highlights less-covered tickers on Seeking Alpha as another source of idea generation. This is our second edition focused on 12 ETF ideas from the last month.We take a ...</p>\n\n<a href=\"https://seekingalpha.com/article/4714923-undercovered-dozen-etf-edition-covered-call-funds-small-cap-value-leveraged-etfs-japan-plus\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"IVV","symbol_name":"标普500指数ETF","start_time":0,"source_url":"https://seekingalpha.com/article/4714923-undercovered-dozen-etf-edition-covered-call-funds-small-cap-value-leveraged-etfs-japan-plus","article_id":"2459404201","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1472468191/image_1472468191.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2459404201","pubTimestamp":1723750257,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"gopixa Introduction The 'Undercovered' Dozen series is an effort to highlight undercovered stocks on our platform for you to have another source for idea generation. 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This is our second edition focused on 12 ETF ideas from the last month.We take a look at funds and ideas from analysts on covered call funds, funds to ride the wave of AI, a few crypto-related funds, and more.Some funds reviewed include YieldMax Universe Fund of Option Income ETF, The ProShares UltraPro QQQ, Global X Robotics & Artificial Intelligence ETF, and iShares U.S. Energy ETF.Take a look and share your thoughts: are any of these worth a deeper review?gopixa Introduction The 'Undercovered' Dozen series is an effort to highlight undercovered stocks on our platform for you to have another source for idea generation. Today we're doing our second edition of a variant on this series, focused explicitly on less covered exchange-traded funds. The structure of the article will be the same as previous editions: seven articles are primary features with an in-depth glimpse of the author's thesis provided as an excerpt, while five others are included with fewer details. In this edition, we are looking at ETFs from articles published from July 17th - August 14th. Take a look at what these ideas might hold for you. And please join the conversation below to share what you think: are any of these worth following up on?  YMAX: One Of The Best Covered-Call Funds        Ticker Rating Analyst   YMAX Buy Skeptical12   Click to enlarge  The evolution of investing is often interesting to see. Capital allocation strategies usually become more sophisticated over time, and usually, individuals have more options as markets adjust to investor demands. A more common form of financial investment that has developed over the last decade is the covered call fund. A number of these types of ETFs have come out over the last decade, and one new covered call fund that recently came to market is the YieldMax Universe Fund of Option Income ETFs (YMAX). I am initiating coverage of the YieldMax Universe Fund of Option Income today with a rating of a buy. This option strategy used by YMAX minimizes net asset value decline and this fund focuses on specific stocks with a higher beta that offers investors better long-term income, and the ETF should continue to pay out solid and consistent income without excessive risk to principal.  CONY: High-Income Play On Bitcoin Speculation        CONY Strong Buy The Gaming Dividend   Click to enlarge  I strongly believe that we are in one of the absolute best times in modern history to be an income-focused investor. There is such an abundance of different high-yielding funds across all asset classes, like REITs, closed-end funds, business development companies, and now option-based ETFs. YieldMax COIN Option Income Strategy ETF (CONY) offers investors a massive 96.5% yield, according to YieldMax's website. YieldMax has launched a plethora of these high-yielding funds over the last twelve months, and CONY is my strongest conviction fund out of them all. I believe that there is both upside price potential as well as huge income potential that can be captured over the next twelve months. My assumption ties to the underlying asset structure that CONY is linked to as well as the current outlook surrounding Bitcoin USD (BTC-USD). I know the relevance of crypto may turn some of you away, but I ask you to stick with me here, as I will try to make this as straightforward as possible.  FEPI: Big Income And I Am Buying This 17% Yielding Covered Call ETF        FEPI Strong Buy Steven Fiorillo   Click to enlarge  I am invested in several ETFs that focus on utilizing a call option strategy to generate income. Some ETFs only write at the money covered calls, while others are a bit more complex. Some ETFs sell covered calls close to the money, and use a large portion of the premium for the monthly dividends, while the remaining premium is used to purchase out-of-the-money options. This allows investors to participate in some upside appreciation if the market climbs higher. The Rex FANG & Innovation Equity Premium Income ETF (FEPI) has been on my radar, but since it's a fairly new product, I wanted to see how its price action was and if it could maintain a fairly consistent dividend before starting a position. Enough time has passed, and I am shocked at how much income FEPI is delivering for shareholders. FEPI is highly concentrated in technology, so if you are bearish on technology going forward, then this probably won't be a good fit for your investment mix. FEPI has only paid 8 distributions and is already yielding 17.4%. From an income perspective, I am bullish on FEPI as I believe technology is going to drive the market higher, and FEPI's holdings have big option premiums, which will allow large distributions to be generated in the future.  AVUV: Still The Best Way To Invest In Small Caps        AVUV Buy Marty Popoff   Click to enlarge  When I turned bullish on Small Caps this spring, I put a Buy recommendation on the Avantis US Small Cap Value ETF (AVUV). Since making that recommendation, AVUV has done quite well, up 12.4% in price terms versus 7.85% for the S&P 500. It should be noted, however, that several weeks before making this call, I also put out a Strong Sell on IWM, the iShares Russell 2000 ETF (IWM), with the caveat that this was related to seasonal factors and flaws in how the index that it tracks, the Russell 2000, is constructed, and not due to my underlying view (which was neutral at the time) on Small Caps. Small Caps have outperformed large caps significantly during the month of July, and many prognosticators believe that this is the start of a larger rotation. While there are legitimate reasons to fear that the market is getting ahead of itself, I believe that in the medium to long term, Small Caps will finally, after 10 years, outperform Large Caps.  EWJ ETF: Good Growth Outlook And Attractive Valuation        EWJ Buy Ploutos Investing   Click to enlarge  iShares MSCI Japan ETF (EWJ) owns a portfolio of about 200 Japanese stocks. The fund tracks the MSCI Japan index. The fund has an expensive expense ratio of 0.5% as other funds such as Franklin FTSE Japan ETF (FLJP) only have an expense ratio of 0.09%. EWJ has slightly underperformed the S&P 500 index in this bull market. Its growth outlook is quite good but still inferior to the S&P 500 index. The fund has done very well in this bull market. In fact, EWJ has delivered a total return of 44.2% since the broader market reached a cyclical low in October 2022, slightly inferior to the S&P 500 index's 55.0%. As can be seen from the chart below, EWJ's return has been in line with the S&P 500 index for most of the past few years but has underperformed in the past few months. Despite EWJ's good earnings growth outlook and attractive valuation, investors should keep in mind the currency risk.  TQQQ: Any Trend Is Your Friend        TQQQ Hold Jeffrey Fischer, CFA   Click to enlarge  Mathematically, it's been well illustrated how most leveraged securities, in most scenarios, over long periods of time should have an expected terminal value of $0. That's pretty bad news for long-term investors of leveraged ETFs, and even the U.S. Securities and Exchange Commission has issued warnings such as this one from 2021 that holding such securities \"for longer than one day\" opens investors up to risks. This same SEC memo went on to warn that the Commission had issued charges against some financial professionals for recommending retail clients hold ETPs that were designed only for very short-term trading strategies. While the rules of mathematics have not changed since 2021, one can't help but notice a certain degree of thawing at the SEC about leveraged ETFs. Consider this updated SEC bulletin from August 2023 where the warnings seem less dire, less alarming, and replaced instead with some examples where leverage certainly didn't happen to work out well for investors. So what's going on here? This article will examine the basic risks of leveraged ETFs, some historical performance lessons, and situations where leveraged securities may be more viable. I'll finish by reviewing the latest stock market correction and investigating what it may mean for the largest of all leveraged ETFs: ProShares UltraPro QQQ ETF (TQQQ).  NVDL: Buy The Real AI Driver And Create DIY Option Income        NVDL Buy Wise Bull   Click to enlarge  AI is coming closer to becoming a reality. The Q2 earnings from the so-called AI players will soon be examined in depth against their AI plans. Some analyst suggests looking at \"a 'more stable' AI play\". I won't use \"AI\" as a playground for this type of \"defensive\" strategy. AI to me is a fast-growth opportunity, which is an inherently risky investment. I could choose not to believe it, or evaluate my risk tolerance together with the matching market environment, or start my betting on the \"true\" opportunity. I will feature a strategy that will use GraniteShares 2x Long NVDA Daily ETF (NVDL) as the starting position to build an AI wealth grower in my portfolio and YieldMax NVDA Option Income Strategy ETF (NVDY) as a feeder pumping money into NVDL. Income investors can also sweeten the deal by selling the juicy covered calls and creating an \"Option Wheel\" on NVDL. The current retreat of NVDL should be a correction in nature which will lead to a healthier market for NVIDIA Corporation (NVDA). I believe it is time to start a powerful income growth engine that strives for an amazing total return with an \"AI chip rush\" tailwind on your side.   The Other Five Fit For Mention SVIX: Blood On The Streets, Time To Buy        SVIX Buy Stony Chambers Asset Research   Click to enlarge -1x Short VIX Futures ETF (SVIX) has implemented VIX calls as a hedge, protecting the fund from significant losses as the VIX surges. Buying SVIX now presents a probabilistically sound opportunity with limited downside and potential for gains as volatility is at historic highs. I think VIX 41 is quite high and now is a good time to start building an SVIX position. BOTZ: Great Long-Term Prospects, But Too Expensive To Pound The Table        BOTZ Hold The Undercover Investor   Click to enlarge Global X Robotics & Artificial Intelligence ETF (BOTZ) is a global ETF focused on robotics and AI, with top holdings including Nvidia, ABB Ltd, and Intuitive Surgical Inc. The robotics and AI industry is rapidly evolving, with applications in manufacturing, logistics, healthcare, and cybersecurity. While the potential for growth in the industry is high, investors should exercise caution and consider the long-term prospects. FBTC: The Pick And Shovel ETF For Bitcoin Exposure        FBTC Buy Mandela Amoussou   Click to enlarge Spot Bitcoin ETFs have seen impressive inflows and institutional investments since launch, with daily inflows majorly outpacing the total daily produced BTC on the Bitcoin network since the halving. Fidelity Wise Origin Bitcoin Fund ETF (FBTC) stands out with experience in crypto-focused products, self-custody, low expense ratio, and strong infrastructure for Bitcoin investing. Avoid 'Investing' In The Volatility Shares' 2x Ether ETF        ETHU Hold Mike Fay   Click to enlarge Volatility Shares' 2x Ether ETF (EHTU) aims to produce double the daily returns of Ethereum. Due to daily rebalancing and high management fees, the fund will decay over time and ultimately underperform the 2x goal. Ethereum itself has a strong fundamental setup with a commanding share of market TVL, stablecoins, and settled value. IYE: U.S. Elections Results Don't Matter, The Energy Sector's Outlook Remains Strong        IYE Hold Uttam Dey   Click to enlarge 2024 is a crucial year for the U.S. as markets assess course trajectories leading up to the election. The energy sector outlook remains strong with increasing investments and demand for oil. The iShares U.S. Energy ETF (IYE) currently trades at generationally low valuation premiums, with the fund valued at ~12x earnings.   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