Investors accustomed to quarterly or monthly dividends can soon see their calendars become fuller. Defiance ETFs on Thursday dropped an ETF that offers something new in the U.S. market: income provided twice weekly.
The Defiance Nasdaq 100 LightningSpread Income ETF (NASDAQ:QLDY), which debuted this week, is promoted as the first ETF to adopt such an aggressive payout schedule. Instead of waiting weeks between dividends, investors may receive cash in their accounts every Thursday and Monday. The expense ratio stands at 1.04%, which looks fine, given the frequent income generation capability of the fund.
Behind the unorthodox design is the fund’s “LightningSpread” strategy, an active strategy that seeks to unite income generation with growth potential. Rather than invest directly in Nasdaq 100 equities, the ETF constructs exposure through long-term, deep in-the-money call options.
The portfolio’s growth side is then combined with a high-frequency income engine: selling zero-days-to-expiration (0DTE) put spreads on the Nasdaq 100 every trading day. The premiums from these short-term trades power the distributions.
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Any surplus capital will not remain idle either. The fund will invest surplus cash in short-term Treasuries and money markets, a move aimed at extracting extra yield.
The twice-weekly distribution schedule distinguishes QLDY from the crowded ETF field. For income-driven investors fed up with the old “wait-and-collect” paradigm, the fund provides an option that better aligns with today’s trading cadences. Yet, as with any new structure, the challenge will be making frequent distributions supportable amid changing market conditions.
Defiance is not new to experimentation in the ETF universe, having made a name for itself with thematic and tactical funds. In QLDY, the company is going double or nothing, literally, on the theory that investors desire exposure to innovative equities and a quicker paycheck cycle.
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