YBIT
YieldMax™ Bitcoin
Option Income
Strategy ETF
The Fund does not invest in or seek exposure to the current “spot” or cash price of Bitcoin. Investors seeking direct exposure to the price of Bitcoin should consider an investment other than the Fund
There is no guarantee that the Fund’s investment strategy will be properly implemented, and an investor may lose some or all of its investment.
Investing in the fund involves a high degree of risk.
Single Issuer Risk.
The Fund’s strategy will cap its potential gains if the shares of the Bitcoin ETP(s) – to which the Fund seeks to provide indirect exposure through the use of options – increases in value, which may not be offset by income received b y the Fund. The Fund may not be suitable for all investors.
Shareholders of the Fund are not entitled to any dividends paid by any Bitcoin ETP.
Distribution Rate*:
30-Day SEC Yield**:
*The Distribution Rate is the annual rate an investor would receive if the most recently declared distribution, which includes option income, remained the same going forward. The Distribution Rate is calculated by multiplying an ETF’s Distribution per Share by twelve (12), and dividing the resulting amount by the ETF’s most recent NAV. The Distribution Rate represents a single distribution from the ETF and does not represent its total return. The 30-Day SEC Yield represents net investment income,which excludes option income, earned by such ETF over the 30-Day period ended at the most recent month-end, expressed as an annual percentage rate based on such ETF’s share price at the end of the 30-Day period. Distributions are not guaranteed. Please note that distributions may include a combination of ordinary dividends, capital gain, and return of investor capital, which may decrease an ETF’s NAV and trading price over time, and may have additional tax implications.
**The Distribution Rate and 30-Day SEC Yield is not indicative of future distributions, if any, on the ETFs. In particular, future distributions on any ETF may differ significantly from its Distribution Rate or 30-Day SEC Yield. You are not guaranteed a distribution under the ETFs. Distributions for the ETFs (if any) are variable and may vary significantly from month to month and may be zero. Accordingly, the Distribution Rate and 30-Day SEC Yield will change over time, and such change may be significant. The distribution may include a combination of ordinary dividends, capital gain, and return of investor capital, which may decrease a fund’s NAV and trading price over time. As a result, an investor may suffer significant losses to their investment. These distribution rates caused by unusually favorable market conditions may not be sustainable. Such conditions may not continue to exist and there should be no expectation that this performance may be repeated in the future. Additional fund risks can be found below.
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance current to the most recent month-end can be obtained by calling (866) 864-3968.
Distribution Details
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*The Distribution Rate is the annual rate an investor would receive if the most recently declared distribution, which includes option income, remained the same going forward. The Distribution Rate is calculated by multiplying an ETF’s Distribution per Share by twelve (12), and dividing the resulting amount by the ETF’s most recent NAV. The Distribution Rate represents a single distribution from the ETF and does not represent its total return. The 30-Day SEC Yield represents net investment income,which excludes option income, earned by such ETF over the 30-Day period ended at the most recent month-end, expressed as an annual percentage rate based on such ETF’s share price at the end of the 30-Day period. Distributions are not guaranteed. Please note that distributions may include a combination of ordinary dividends, capital gain, and return of investor capital, which may decrease an ETF’s NAV and trading price over time, and may have additional tax implications.
**The Distribution Rate and 30-Day SEC Yield is not indicative of future distributions, if any, on the ETFs. In particular, future distributions on any ETF may differ significantly from its Distribution Rate or 30-Day SEC Yield. You are not guaranteed a distribution under the ETFs. Distributions for the ETFs (if any) are variable and may vary significantly from month to month and may be zero. Accordingly, the Distribution Rate and 30-Day SEC Yield will change over time, and such change may be significant. The distribution may include a combination of ordinary dividends, capital gain, and return of investor capital, which may decrease a fund’s NAV and trading price over time. As a result, an investor may suffer significant losses to their investment. These distribution rates caused by unusually favorable market conditions may not be sustainable. Such conditions may not continue to exist and there should be no expectation that this performance may be repeated in the future. Additional fund risks can be found below.
Fund Overview
YBIT seeks to generate current income via a synthetic covered call strategy on one or more select U.S.-listed Bitcoin ETPs. YBIT is actively managed by ZEGA Financial.
When selecting Bitcoin ETPs on which to trade options, ZEGA focuses primarily on the following two key factors:
- Preference for Bitcoin ETPs that hold “physical” or “spot” Bitcoin over such ETPs that reference Bitcoin indirectly via futures contracts.
- Selection of Bitcoin ETPs that have sufficient option liquidity to support YBIT’s trading activities.
Investment Objective
The Fund’s primary investment objective is to seek current income. The Fund’s secondary investment objective is to seek exposure to the share price of the Bitcoin ETP(s), subject to a limit on potential investment gains.
Fund Information
*The 30-Day SEC Yield represents net investment income earned by the Fund over the 30-day period ended on the date indicated by the Yield, expressed as an annual percentage rate based on the Fund’s share price at the end of the 30-day period. The unsubsidized 30-Day SEC Yield does not reflect any fee waivers/reimbursements/limits in effect.
Fund Data & Pricing
**Median 30-Day Spread is a calculation of Fund’s median bid-ask spread, expressed as a percentage rounded to the nearest hundredth, computed by: identifying the Fund’s national best bid and national best offer as of the end of each 10-second interval during each trading day of the last 30 calendar days; dividing the difference between each such bid and offer by the midpoint of the national best bid and national best offer; and identifying the median of those values.
Performance
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance current to the most recent month-end can be obtained by calling (866) 864-3968.
Short term performance, in particular, is not a good indication of the fund’s future performance, and an investment should not be made based solely on returns. Returns beyond 1 year are annualized. A fund’s NAV is the sum of all its assets less any liabilities, divided by the number of shares outstanding. The market price is the most recent price at which the fund was traded. The fund intends to pay out dividends and interest income, if any, monthly. There is no guarantee these distributions will be made.
Holdings
Top 10 Holdings
Purchase Information
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The YieldMax™ Bitcoin Option Income Strategy ETF (YBIT) is available through various channels including via phone (866) 864-3968, broker-dealers, investment advisers, and other financial services firms, including:
This Fund is not affiliated with these financial service firms.
Their listing should not be viewed as a recommendation or endorsement.
Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information are in the prospectus. Please read the prospectuses carefully before you invest.
Risk Disclosures (Unless stated otherwise, the noted risks below apply to all YieldMax ETFs referenced above)
Investing involves risk. Principal loss is possible.
ETP Risk. The Fund invests in options contracts that are based on the value of the Bitcoin ETP. This subjects the Fund to certain of the same risks as if it owned shares of the Bitcoin ETP, even though it does not. Bitcoin ETPs are subject, but not limited, to significant risk and heightened volatility. An investor in a Bitcoin ETP may lose their entire investment. Bitcoin ETPs are not suitable for all investors. In addition, not all Bitcoin ETPs are registered under the Investment Company Act of 1940. Those Bitcoin ETPs that are not registered under such statute are therefore not subject to the same regulations as exchange traded products that are so registered.
Bitcoin Investment Risk: The Fund’s indirect investment in Bitcoin, through holdings in one or more Underlying ETPs, exposes it to the unique risks of this emerging innovation. Bitcoin’s price is highly volatile, and its market is influenced by the changing Bitcoin network, fluctuating acceptance levels, and unpredictable usage trends. Not being a legal tender and operating outside central authority systems like banks, Bitcoin faces potential government restrictions. For instance, some countries may limit or ban Bitcoin transactions, negatively impacting its market value.
Digital Assets Risk: Digital assets like Bitcoin, designed as mediums of exchange, are still an emerging asset class. They operate independently of any central authority or government backing and are subject to regulatory changes and extreme price volatility. The trading platforms for digital assets are relatively new, largely unregulated, and thus more vulnerable to fraud and failures compared to traditional, regulated exchanges. Shutdowns of these platforms due to fraud, technical glitches, or security issues can significantly affect digital asset prices and market volatility.
Digital Asset Markets Risk: The digital asset market, particularly Bitcoin, has experienced considerable volatility, leading to market disruptions and erosion of confidence among market participants. This instability and the resultant negative publicity could adversely affect the Fund’s reputation and trading prices. Ongoing market turbulence could significantly impact the value of the Fund’s share.
Blockchain Technology Risk: Blockchain technology, which underpins Bitcoin and other digital assets, is relatively new, and many of its applications are untested. The adoption of blockchain and the development of competing platforms or technologies could affect its usage. Investments in companies or vehicles that utilize blockchain technology are subject to market volatility and may experience lower trading volumes compared to more established industries. Additionally, regulatory changes, internet disruptions, cybersecurity incidents, and intellectual property disputes could further affect the adoption and functionality of blockchain technology.
Potentially No 1940 Act Protections Risk. As of the date of this Prospectus, there is only a single eligible Underlying ETP, and it is an investment company subject to the 1940 Act. However, it is expected that in the future, one or more Underlying ETP will not be registered as an investment company subject to the 1940 Act. Accordingly, investors in such an Underlying ETP would not have the protections expressly provided by that statute, including: provisions preventing Underlying ETP insiders from managing an Underlying ETP to their benefit and to the detriment of shareholders; provisions preventing an Underlying ETP from issuing securities having inequitable or discriminatory provisions; provisions preventing management by irresponsible persons; provisions preventing the use of unsound or misleading methods of computing Underlying ETP earnings and asset value; provisions prohibiting suspension of redemptions (except under limited circumstances); provisions limiting fund leverage; provisions imposing a fiduciary duty on fund managers with respect to receipt of compensation for services; and provisions preventing changes in an Underlying ETP’s character without the consent of shareholders. Although the Fund invests in one or more Underlying ETPs only indirectly, the Fund’s investments are expected to be subject to loss as a result of these risks.
Single Underlying ETP Risks. As of the date of this Prospectus, there is only a single eligible Underlying ETP, namely, the Bitcoin Strategy ETF (BITO). BITO seeks to provide investment results that correspond to the performance of Bitcoin by primarily investing in Bitcoin futures contracts. BITO does not invest directly in or hold Bitcoin. BITO is subject to many of the same risks to which the Fund is subject. For example, Bitcoin Risks, Counterparty Risks, Derivatives Risks, ETF Risks, Liquidity Risk, Money Market Instrument Risks, Non-Diversification Risks, and Management Risks. BITO is also subject to the following risks, which are described in more detail in BITO’s prospectus:
- Bitcoin Futures Risk – The market for Bitcoin futures may be less developed, and potentially less liquid and more volatile, than more established futures markets.
- Bitcoin Futures Capacity Risk – If BITO encounters obstacles in obtaining exposure to Bitcoin futures contracts, such as limited liquidity or disruptions in the market, it may fail to achieve its investment objective.
- Cost of Futures Investment Risk – When nearing expiration, BITO will “roll” Bitcoin futures contracts by selling expiring contracts and purchasing higher-priced, longer-dated contracts, a process particularly affected by contango, historically common in Bitcoin futures, potentially impacting BITO’s performance compared to spot Bitcoin and hindering its investment objectives, especially if investing in back-month futures contracts. 7
- Cayman Subsidiary Investment Risk – BITO invests in futures via a wholly owned subsidiary domiciled in the Cayman Islands. Changes in laws could result in the inability of BITO to operate as intended and could negatively affect BITO and its shareholders.
- Borrowing Risks – Borrowing by BITO could lead to forced liquidation of positions in unfavorable market conditions to meet repayment obligations, amplifying the risk of loss and potentially raising BITO’s volatility.
- Concentration Risks – Due to BITO’s substantial allocation to Bitcoin futures, BITO is susceptible to larger market fluctuations compared to funds with more diversified investments across various industries.
Call Writing Strategy Risk. The path dependency (i.e., the continued use) of the Fund’s call writing strategy will impact the extent that the Fund participates in the positive price returns of the underlying reference asset and, in turn, the Fund’s returns, both during the term of the sold call options and over longer time periods.
Counterparty Risk. The Fund is subject to counterparty risk by virtue of its investments in options contracts. Transactions in some types of derivatives, including options, are required to be centrally cleared (“cleared derivatives”). In a transaction involving cleared derivatives, the Fund’s counterparty is a clearing house rather than a bank or broker. Since the Fund is not a member of clearing houses and only members of a clearing house (“clearing members”) can participate directly in the clearing house, the Fund will hold cleared derivatives through accounts at clearing members.
Derivatives Risk. Derivatives are financial instruments that derive value from the underlying reference asset or assets, such as stocks, bonds, or funds (including ETFs), interest rates or indexes. The Fund’s investments in derivatives may pose risks in addition to, and greater than, those associated with directly investing in securities or other ordinary investments, including risk related to the market, imperfect correlation with underlying investments or the Fund’s other portfolio holdings, higher price volatility, lack of availability, counterparty risk, liquidity, valuation and legal restrictions.
Options Contracts. The use of options contracts involves investment strategies and risks different from those associated with ordinary portfolio securities transactions. The prices of options are volatile and are influenced by, among other things, actual and anticipated changes in the value of the underlying instrument, including the anticipated volatility, which are affected by fiscal and monetary policies and by national and international political, changes in the actual or implied volatility or the reference asset, the time remaining until the expiration of the option contract and economic events.
Distribution Risk. As part of the Fund’s investment objective, the Fund seeks to provide current monthly income. There is no assurance that the Fund will make a distribution in any given month. If the Fund does make distributions, the amounts of such distributions will likely vary greatly from one distribution to the next.
High Portfolio Turnover Risk. The Fund may actively and frequently trade all or a significant portion of the Fund’s holdings.
Liquidity Risk. Some securities held by the Fund, including options contracts, may be difficult to sell or be illiquid, particularly during times of market turmoil.
Non-Diversification Risk. Because the Fund is “non-diversified,” it may invest a greater percentage of its assets in the securities of a single issuer or a smaller number of issuers than if it was a diversified fund.
New Fund Risk. The Fund is a recently organized management investment company with no operating history. As a result, prospective investors do not have a track record or history on which to base their investment decisions.
Price Participation Risk. The Fund employs an investment strategy that includes the sale of call option contracts, which limits the degree to which the Fund will participate in increases in value experienced by the underlying reference asset over the Call Period.
Single Issuer Risk. Issuer-specific attributes may cause an investment in the Fund to be more volatile than a traditional pooled investment which diversifies risk or the market generally. The value of the Fund, which focuses on an individual security (ARKK, TSLA, AAPL, NVDA, AMZN, META, GOOGL, NFLX, COIN, MSFT, DIS, XOM, JPM, AMD, PYPL, SQ, MRNA, AI, MSTR, Bitcoin ETP), may be more volatile than a traditional pooled investment or the market as a whole and may perform differently from the value of a traditional pooled investment or the market as a whole.
Investors in the Fund will not have rights to receive dividends or other distributions, if any, with respect to the Fund’s underlying reference asset.
YieldMax™ ETFs are distributed by Foreside Fund Services, LLC. Foreside is not affiliated with Tidal Financial Group, YieldMax™ ETFs or ZEGA Financial.
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