As advisors and investors search for more income in today’s low-yield environment, unique solutions are more important than ever. One growing ETF option is the Strategy Shares Nasdaq 7 Handl Index ETF (HNDL).
HNDL seeks investment results that correlate generally to the price and yield performance of the NASDAQ 7 HANDL™ Index. The index consists of securities issued by exchange-traded funds (“ETFs”) and is split into two components, with a 50% allocation to fixed income and equity ETFs (the “Core Portfolio”) and a 50% allocation to ETFs of 12 asset categories (the “Explore Portfolio”).
The strategy is resonating with end users of exchange traded funds as HNDL recently joined the $100 million in assets under management club. That’s good for asset growth of more than 300% since the start of this year.
“We are thrilled that the HNDL ETF has rapidly surpassed the $100 million AUM milestone,” said Jerry Szilagyi, CEO of Rational Advisors, Inc., the investment advisor for Strategy Shares. “HNDL ETF’s consistent 7% distribution rate has offered an attractive option for addressing the challenges of meeting cash flow needs in a zero-yield world without requiring investors to take on unacceptable credit risk.”
Get a Handle on the HNDL ETF
The Long-Term focus part of the HNDL portfolio includes allocations to broad-based, cost-efficient fixed income ETFs as well as equity funds, such as the Invesco QQQ Trust (NASDAQ: QQQ).
“The Nasdaq 7HANDL ETF has adopted a policy to pay monthly distributions on Fund shares at a target rate that represents an annualized payout of approximately 7.0% on the Fund’s per-share net asset value on the date of a distribution’s declaration,” according to StrategyShares. “All or a portion of a distribution may consist of a return of capital from the original investment and the distribution rate may be modified at any time.”
The ETF’s portfolio is split into two equally-weighted categories, a Core Portfolio and a Dorsey Wright Explore Portfolio. The Core Portfolio includes a long-term focus with a 70% tilt toward U.S. aggregate fixed-income assets and 30% in U.S. large-cap equities. Meanwhile, the Dorsey Wright Explore Portfolio is takes a tactical allocation stance with U.S. fixed-income, U.S. blend, U.S. equity and U.S. alternative assets, or categories that have historically provided high levels of income. Both halves are rebalanced on a monthly basis.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.