A new product is entering the U.S. ETF market — the GIF REX Shares ETF, attracting attention with its unusual payout model: the fund plans to distribute income to investors weekly. To do this, it uses a covered call strategy on individual stocks, enhanced with moderate leverage. This format makes the product stand out from traditional equity ETFs, as it is focused not only on market exposure but also on generating regular cash flow through option premiums.
GIF REX Shares ETF Structure and Portfolio Composition
The new REX Shares fund, trading under the ticker GIF, combines nine covered call strategies on individual stocks within a single instrument. Each of these strategies is implemented through a separate single-stock ETF, while the overall fund allocates capital across them on a roughly equal basis.
Each component follows a similar approach: the underlying ETF builds a position in one specific stock, applies target leverage of approximately 1.25x, and systematically sells covered call options at the same time. The goal of this model is to generate recurring cash inflows from option premiums, which can then be used to make distributions to investors.
This type of structure allows the fund to combine direct participation in the performance of underlying stocks with an additional income component. At the same time, however, it makes the fund significantly more complex and riskier than traditional ETFs focused on broad market indices.
How the Leveraged Covered Call Strategy Works
The covered call strategy involves selling call options on stocks that are already held in the fund’s portfolio. The buyer of the option pays an upfront premium, and that premium becomes current income for the fund. This creates a cash flow that can be distributed among ETF holders.
However, this strategy also has a downside: if the price of the underlying asset rises sharply and moves above the strike price of the sold option, the fund gives up part of its potential upside. In other words, the investor receives current income in the form of option premiums, but sacrifices part of the possible gains during strong market rallies.
In the case of GIF, each underlying ETF applies this mechanism to a separate stock, using target leverage of around 1.25x. This means that both gains and losses may be amplified compared to simply holding the stock without leverage. At the same time, the key source of funds for the fund’s weekly dividend distributions remains the premiums received from selling covered calls.
It is important to note that these payouts are not fixed. Their size may vary depending on market volatility, option pricing, and the behavior of the underlying stocks themselves. As a result, the fund’s real-world yield will depend on current market conditions rather than on a predetermined coupon.
Stocks in the Portfolio: Crypto, AI, Pharma, and Retail
The GIF ETF has already begun trading on Cboe Global Markets. Its core portfolio consists of nine publicly traded companies, each serving as the basis for a separate covered call strategy:
- Nvidia
- Tesla
- Strategy
- Coinbase
- Robinhood
- Palantir
- CoreWeave
- Eli Lilly
- Walmart
This mix of holdings creates a rather unusual sector combination. The fund includes companies tied to cryptocurrency, artificial intelligence, technology, pharmaceuticals, and large-scale retail. On one hand, this provides a degree of sector diversification within a single fund. On the other hand, a significant share of these holdings consists of volatile growth stocks, which raises the product’s overall risk profile.
Coinbase and Strategy stand out in particular, as these companies are the most directly connected to the crypto sector. Through their inclusion, the fund gains added sensitivity to the performance of digital assets, especially Bitcoin and the broader sentiment surrounding it.
Even so, the combination of volatile growth stocks and technology names, together with the use of leverage, makes the fund riskier than traditional ETFs focused on broad indices or dividend baskets that do not rely on options strategies.
The Role of Strategy as a Corporate Bitcoin Giant
Strategy, formerly known as MicroStrategy, remains one of the largest corporate holders of Bitcoin in the world. At present, the company holds 717,722 BTC, which is equivalent to roughly 3.4% of Bitcoin’s theoretical maximum supply of 21 million coins.
For this reason, the inclusion of Strategy in the new fund makes GIF partially tied to the Bitcoin theme. The stock has long been viewed by the market not simply as a technology share, but as a corporate proxy for gaining Bitcoin exposure through the stock market.
Despite its massive Bitcoin reserve, Strategy shares have shown notable weakness in recent months. According to the market analysis referenced, the stock has fallen by more than 60% over the past six months and by around 50% over the past year. In addition, some analytical reports, including assessments from Goldman Sachs, have indicated that Strategy is one of the most heavily shorted large-cap stocks in the United States when measured by short interest as a share of free float.
As a result, Strategy’s presence in GIF both increases the fund’s appeal for investors seeking Bitcoin exposure and raises its risk profile. High volatility, strong dependence on BTC price action, and additional pressure from short positions make this one of the most aggressive components in the portfolio.
New Strategy-Linked Products on the European Market
The launch of the GIF ETF is taking place alongside the debut of new Strategy-linked instruments on European exchanges as well. For example, 21Shares announced the launch of a product giving European investors access to STRC — Strategy’s perpetual preferred capital instrument with a floating rate.
The 21Shares Strategy Yield ETP began trading on Euronext Amsterdam under the ticker STRC NA. Strategy describes STRC as a digital credit-style instrument offering an annual yield of 11.25%, directly linked to the company’s Bitcoin reserves.
This launch fits into a broader strategy aimed at building fixed-income instruments backed by the company’s BTC treasury. The idea is to use existing Bitcoin reserves as the foundation for issuing coupon-bearing and income-generating securities aimed at investors looking for alternative ways to gain crypto exposure through regulated exchange-traded products.
How the GIF ETF’s Weekly Dividend Distribution Works
The income earned by the GIF ETF is generated primarily through the premiums collected from covered call options sold by the nine underlying funds. Each of these single-stock ETFs runs its own strategy and creates a cash flow, which is then pooled and used for distributions to holders of the combined fund.
This is what enables the fund to offer weekly payouts. Unlike many traditional ETFs, where dividends may be distributed monthly or quarterly, GIF is designed for a more frequent payment schedule, which may appeal to investors seeking regular cash flow.
At the same time, the 1.25x leverage factor amplifies both positive and negative outcomes compared with simply holding the underlying stocks without leverage. In practice, the investor accepts a trade-off: they give up part of the potential upside in exchange for a steadier stream of option premium income.
At this stage, REX Shares has not yet published a precise estimate of GIF’s expected yield. This means that the size of future weekly distributions is not guaranteed in advance and will directly depend on market volatility, option pricing, and the behavior of the individual stocks within the portfolio.
Risk Assessment and Outlook for the New ETF
Compared with a classic index ETF, GIF has a much more pronounced and aggressive risk profile. This is due to several structural features at once: the use of leverage, the focus on individual stocks rather than a broad index, and the systematic sale of call options.
During rising markets, this structure may provide an attractive cash flow, but in declining markets losses may also be magnified. In addition, selling covered calls limits participation in sharp upside moves in individual stocks, which is especially important in the case of volatile technology and crypto-related names.
On the other hand, for investors seeking frequent distributions and willing to take on elevated risk, the weekly dividend model may look compelling. The presence of holdings tied to cryptocurrency and artificial intelligence adds to the fund’s appeal for a more speculative audience, but also introduces additional structural volatility.
As such, the GIF ETF can be viewed as a specialized income-oriented instrument for investors with a high risk tolerance, rather than as a conservative alternative to traditional dividend or index funds.
Conclusion
The launch of the GIF ETF and the parallel emergence of STRC-linked products confirm growing market interest in hybrid exchange-traded instruments that combine Bitcoin exposure, options strategies, and leverage. These kinds of products reflect issuers’ efforts to offer investors not only participation in the appreciation of selected assets, but also recurring income through more complex financial structures.
Over the coming quarters, market performance itself will show how sustainable this weekly distribution model proves to be, whether it can maintain investor interest during periods of elevated volatility, and how strong demand for such instruments will be among both institutional and retail audiences.
This material is provided for informational purposes only and does not constitute financial, investment, or any other form of advice. Investments in crypto assets and related financial instruments involve the risk of partial or total loss of capital.