REX NVDA Growth & Income ETF: Forget ULTY and Buy This New ETF Instead

In the world of ETFs, innovation never sleeps. Amid a crowded field of income-generating options, the REX NVDA Growth & Income ETF (ticker: NVII) has recently surfaced, offering a compelling blend of growth and income—an appealing alternative to traditional funds like ULTY. Born in the AI and semiconductor boom, NVII delivers weekly income, leveraged exposure, and option-based strategies, wrapped in a nimble structure. Let’s dive in and explore why this modern ETF might deserve a spot in your portfolio.

1. What Is NVII? A Fresh Take on Covered Calls

Launched on May 28, 2025, NVII leads REX Shares’ new Growth & Income Covered Call ETF Suite, offering a unique structure combining amplified exposure to Nvidia (NVDA) with regular income potential NASDAQ Trader+13etf.com+13Seeking Alpha+13.

Dual Strategy:
- Half the portfolio employs a covered call strategy, selling short-term, out-of-the-money calls to generate weekly premiums.
- The other half remains fully exposed to Nvidia’s price movement, preserving upside potential Reuters+4REX Shares+4etf.com+4.
Leverage Range: Targets ~1.25× daily exposure, though actual leverage may range between 1.05× and 1.50×, depending on market conditions Yahoo Finance+12REX Shares+12Nasdaq+12.

In short, NVII aims to deliver a hybrid of income and capital appreciation, all within a dynamic, actively managed ETF framework.

2. NVII vs. ULTY: Why NVII Could Be the More Attractive Bet

While ULTY (a hypothetical or traditional income-oriented ETF) might offer stable payouts, NVII brings something fresh to the table:

Weekly Payouts: NVII pays weekly distributions, delivering faster cash flow versus monthly or quarterly payouts. Recent dividends, such as $0.2191 (ex-dividend date Aug 19, 2025) illustrate this frequency Seeking Alpha+12REX Shares+12Nasdaq+12Seeking Alpha.
Potentially Higher Yield: NVII's distribution rate (annualized based on most recent weekly payout) stands around 34.72%, while the 30‑Day SEC Yield is about 2.73%—reflecting net investment income separate from option premiums Seeking Alpha+7REX Shares+7REX Shares+7.
Growth Exposure: ULTY might tilt toward income at the expense of growth, but NVII's strategy allows uncapped upside on half its position, giving investors exposure to NVDA’s rally potential.
Modern ETF Design: Leveraging synthetic exposures, active rebalancing, and option income, NVII caters to today's savvy investors seeking dynamic income strategies—not just static dividend-focused models.

3. Performance Snapshot & Metrics

Although NVII is a recent launch, early performance and key metrics provide valuable insights:

Since Inception (as of June 30, 2025):
- NAV return: ~17.62%
- Market price return: ~17.90%
- S&P 500 YTD comparison: ~4.79% Nasdaq+2Reuters+2Nasdaq+4REX Shares+4ETF Database+4
Real-Time Metrics (Aug 20, 2025):
- Closing price: $31.33 (at-market); after-hours: $31.64
- Assets under management: ~$22.07 million
- Dividend yield (TTM): ~7.20% annualized, based on weekly payouts
- Expense ratio: 0.99%
- Ex-dividend date: August 19, 2025 StockAnalysis+2etf.com+2

4. Income Generation: How Weekly Distributions Work

NVII’s weekly distributions stem chiefly from option premiums earned. Here’s how they function:

Option Strategy: 50% of the fund writes covered calls, generating weekly premium income.
Leverage & Uncovered Portion: The rest enjoys 1.05–1.50× exposure to NVDA, preserving upward potential.
Distribution Components:
- Return of Capital (ROC): Many distributions may include ROC, effectively returning your own investment rather than earned income—important for tax treatment and NAV impact REX Shares+1REX Shares+2Nasdaq+2.
- SEC Yield: A lower metric (2.73%) reflects only net investment income, excluding option premiums and ROC REX Shares+1.
Mechanics Caution: Active weekly rebalancing and leveraging introduce complexity, meaning long-term returns may diverge from NVDA’s stock performance due to compounding and volatility drag REX SharesNASDAQ Trader.

5. Risks to Be Aware Of

NVII’s strategy is clever—but not without risks. Here’s what you need to consider:

High Leverage: Targets 1.05×–1.50× daily exposure; even with moderate volatility, this can magnify both gains and losses Yahoo Finance+9Morningstar+9Morningstar+9REX Shares+2Nasdaq+2.
Return of Capital Distributions: ROC reduces NAV; investors shouldn’t assume payouts are gains.
Tracking Error & Compounding: Over time, daily leverage can create divergence from NVDA’s long-term returns.
Only Partial Upside: Writing calls caps upside on half the portfolio.
Synthetic Exposure Risk: NVII uses derivatives (swaps, options) instead of holding NVDA stock directly—introducing counterparty and liquidity risk Seeking Alpha+6REX Shares+6etf.com+6.
Concentration Risk: Non-diversified, single-stock exposure increases volatility and idiosyncratic risk.
Ideal for Active Investors: Only suitable for investors who monitor weekly and understand option mechanics REX Shares.

6. Who Should Consider NVII

Potential Fit:

Investors seeking weekly income, not bound by monthly or quarterly constraints.
Those bullish on Nvidia’s continued momentum, especially in AI/semiconductors.
Sophisticated or self-directed investors who understand leveraged ETFs and options.

Not a Fit For:

Passive investors or laddered income seekers (bonds, dividend ETFs).
Those averse to complexity and high volatility.
Long-term buy-and-hold investors preferring broad diversification.

7. Next Steps Before Investing

If NVII sounds intriguing, here’s your pre-investment checklist:

Read the Prospectus—especially sections on leverage strategy, ROC, and risk disclosures ETF Database+4Nasdaq+4StockAnalysis+4.
Compare Similar ETFs—such as COII (bitcoin), MSII (MicroStrategy), TSII (Tesla) in REX’s suite, or broader covered call ETFs for structure comparison.
Review Tax Implications—ROC distributions may affect cost basis and tax treatment.
Simulate Performance—consider how NVII might perform in flat, upward, and downward markets.
Plan Monitoring—weekly payouts require observations to assess sustainability and rebalancing effects.

Conclusion: A Bold Option for the Growth & Income Crowd

NVII is no vanilla ETF—it’s a bold innovation blending leveraged exposure, covered-call income, and synthetic structures into a single, weekly-paying fund. Unlike traditional income ETFs that might trade growth for yield, NVII walks that tightrope, offering weekly cash flow alongside exposure to Nvidia’s growth potential.

If you're comfortable with complexity and have conviction in Nvidia’s path forward, this may well be a strategy to consider—especially when compared to more conventional funds like ULTY. That said, as with any concentrated, leveraged product, understanding the mechanics is key to avoiding unexpected surprises.

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