REX Shares bundles 9 ETFs into one GIF fund – Diversification or dilution?
Diversification stays central to investor technique.
Leaning into that, REX Shares has introduced the REX Progress & Revenue Universe ETF (GIF). It combines its 9 ETFs right into a single fund, providing “diversified” publicity that features crypto-linked belongings.
In different phrases, not like conventional Bitcoin [BTC] or Ethereum [ETH] ETFs that observe a single asset class, GIF spreads danger throughout a number of shares spanning tech, retail, healthcare, and crypto-related sectors, making it a structurally broader funding method.
Supply: Businesswire
Trying on the particulars, three of the 9 underlying ETFs are straight crypto-linked – MSII (Technique, recognized for its BTC holdings), COII (Coinbase, a crypto change), and HOII (Robinhood, which affords crypto buying and selling).
From a construction standpoint, every ETF targets 1.25x publicity to its inventory and makes use of coated calls on roughly half of its holdings to generate weekly earnings. All whereas the remainder stays invested to profit if the inventory value rises.
In sensible phrases, REX Shares is making an attempt to combine regular earnings with sustained inventory upside, whereas conserving diversification intact. Nevertheless, as famous by AMBCrypto, this additionally raises a structural query.
Latest cycles have seen halving returns shrink amid heavier ETF flows. In such an atmosphere, does REX Shares’ method mirror a shift in direction of extra risk-managed crypto publicity, or does it danger additional capping the upside?
REX Shares’ earnings technique meets post-halving actuality
The distinction between conventional ETFs and REX lies within the construction.
Traditional ETFs sometimes observe an index (like Bitcoin), keep 1x publicity, and depend on value appreciation for returns. REX’s mannequin, in contrast, layers in leverage and coated calls to generate weekly earnings.
Why does that matter? As AMBCrypto notes, that is the place the shift turns into clear. REX Shares is leaning in direction of “engineered yield” over pure crypto beta, reflecting the cooling momentum seen in conventional ETFs.
Supply: TradingView (IBIT/USD)
Take BlackRock’s iShares Bitcoin Belief (IBIT) as a living proof.
In risk-off markets, IBIT sees vital outflows, amplifying downside pressure. With two consecutive destructive quarters, the fund has declined by almost 50%, underscoring the volatility tied to single-asset publicity.
The outcome? Extended outflows restrict BTC accumulation. REX Shares, however, focuses on a mixture of diversified publicity and earnings era somewhat than relying solely on value actions. This makes it higher aligned to the present post-halving market actuality.
Last Abstract
- REX Shares’ GIF combines 9 ETFs, utilizing modest leverage and coated calls to generate weekly earnings.
- Not like pure crypto ETFs, REX’s construction emphasizes diversification, making it higher aligned with the present post-halving market atmosphere.
