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There is now a fund that will pay you an income pegged to the dividend yield of the S&P 500, drawn from a company that has never paid a dividend in its life. There are six of them, in fact, and they all arrived on the same day.
FT Vest Single Stock Target Income ETFs (XVAD, XVAZ, XVGL, XVMT, XVMS, XVPT; Cboe BZX)
One each for AMD, Amazon, Alphabet, Meta, Microsoft and Palantir. Each fund holds its stock, sells options against it, and targets an annual income level of roughly fifteen percentage points above the dividend yield of the S&P 500, before fees.
Read the mechanism twice, because the benchmark is where the interest lies. The target is defined by reference to the income thrown off by five hundred large companies, most of which exist in industries where paying shareholders is a settled habit. It is then delivered by six technology names that, between them, distribute very little, and two of which have never paid a dividend at all.
So the money does not come from the companies. It comes from selling away the upside of precisely the stocks people bought for the upside. That is a perfectly legitimate trade, and everyone involved understands the mechanics. It is just worth being clear that the income is not being paid to you by Microsoft. It is being paid to you by a stranger who wanted your gains and was willing to pay cash for them.
An earlier wave covered Tesla, Apple and Nvidia, with a fourth following shortly behind. The wider Target Outcome range now runs to around a hundred and forty funds. This is no longer product development. It is a production line, and it has clearly been told to keep the belt moving.
iShares Future AI Beneficiaries ETF (AIBF, NYSE Arca)
BlackRock already sells you the AI companies. Having occupied the obvious positions, it has now named a fund after the beneficiaries.
The name is doing all the work here, and the distinction it draws is subtle but important. A beneficiary is not a participant. A beneficiary is a company sitting quietly in an unrelated industry that is about to get a tailwind from someone else's enormous capital expenditure. It is the second derivative of the trade, and it now has a ticker.
There is a real thesis in there, and it is arguably the more interesting one. Most of the economic surplus from a general-purpose technology has historically accrued to the users rather than the builders. The railways made more money for everyone who shipped things than for most of the people who laid track. The industry has simply taken a while to get around to packaging the passengers.
21Shares ether.fi ETP (ETHFI, Euronext Paris and Amsterdam)
ether.fi is a liquid restaking protocol with several billion dollars of value locked in it. ETHFI is its governance token, and the token's stated purpose is to let holders vote on fee structures, treasury allocation, and which services the protocol chooses to support.
There is now a physically backed exchange-traded product on it, issued out of Switzerland.
Consider what the buyer is actually getting. The token exists to confer a vote. The wrapper exists to spare the buyer any contact with the machinery that would let them cast one. The terms are admirably clear on the related point that no staking rewards reach the holder either. What arrives in the brokerage account is the price of a governance right, cleanly separated from the governance, for an annual investor fee of two and a half percent.
I am not going to comment further here, as my brain exploded halfway through the analysis and I am not sure I am intelligent enough to comprehend it. If anybody is willing to explain it to me with glove puppets, I would be forever grateful.
Invesco MSCI World UCITS ETF Dist (MWDP, London Stock Exchange)
A distributing share class of a developed world equity tracker, charging five basis points. That is the entire product. Twenty-three developed markets, quarterly income, and an annual cost that, on a thousand pounds, comes to fifty pence.
I still love the simple products I can explain and justify to my parents!
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