In professional sports, when a successful play is executed, you often hear the coach or star player shout “Run it back” – indicating to the team that the play worked beautifully and we are going to do it again; because why stop a good thing if it works. Well, Purpose Investments is ‘running it back’ with their Yield Shares ETFs, as they recently announced the addition of two new offerings, Microsoft Yield Shares Purpose ETF (Ticker: MSFY) and NVIDIA Yield Shares Purpose ETF (Ticker: YNVD) to the Yield Shares by Purpose suite.

The launch of these ETF offerings comes at a timely and intentional moment. Firstly, the initial offerings in Purpose’s Yield Shares suite – YAMZ,APLY, YTSL, YGOG, and BRKY – recently attained their 1-year performance track record. Secondly, given the seminal roles both NVIDIA and Microsoft have in developing and advancing artificial intelligence (AI) through large language models, providing solutions that offer comprehensive exposure to these companies, which are currently elevating the technology landscape, is beneficial to investors.     

In speaking with Vlad Tasevski, Head of Asset Management at Purpose Investments he highlighted the value proposition of these recently launched solutions by stating, “These new offerings are more than just investment products; they represent our belief in Yield Shares as a distinct asset class of investments, uniquely positioned to assist investors in achieving their diverse financial goals. We’re in the midst of the next technological revolution with AI, and NVIDIA and Microsoft are at the forefront of this movement. With their additions, we’re thrilled to offer Canadian investors exposure to this exciting space while enhancing their monthly distributions.”

Single-name ETF Refresher

Yield Shares by Purpose Investments are single-name ETF solutions that allow investors to earn an attractive monthly yield. The firm’s initial yield share offerings were launched on Cboe Canada (formerly NEO Exchange), as such we wrote an in-depth primer on these innovative solutions that can be read here.  In summarizing the key benefits of these investment offerings, they can be detailed as such:

• Monthly Distribution Yield: Investors can earn an enhanced monthly yield from their individual stock exposure above any dividends declared on the underlying stock where applicable. This yield enhancement comes in the form of additional monthly distributions compared with the underlying common stock, which pays a relatively lower or no distribution yield.
• Growth Potential: Investors can participate in the long-term growth of the underlying companies. In the case of Microsoft and NVIDIA, these are companies at the forefront of technological innovation.
• Avoid Currency Risk: Canadian investors can gain exposure to individual U.S. stocks through an investment denominated in Canadian dollars that hedges the U.S. dollar exposure.
• Reduced Volatility: The options strategy provides a cushion against declining stock prices.
• Tax Efficiency: The yield generated by the covered call strategy will be tax efficient in the form of capital gains.

Conclusion

Purpose Investments Yield Share Suite provides investors with a new tool to manage exposure to their favorite individual stocks based on their outlook on the company. Furthermore, the solutions can be used in a complementary manner with existing individual stock holdings in a portfolio and are best suited for investors with a preference for yield.

For investors interested in learning more about Purpose Investments Yield Shares Suite, their dedicated website provides an in-depth overview of the product offering.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.