Episode summary
GraniteShares' Will Rhind on Rise of Options-Based ETFs
ETF Prime
· · Hosts: Nate Geraci, Simeon Hyman · Guests: Will Rhind, Zeno Mercer
Summary
AI ETF demand is still in the early stages, but the market is already rewarding funds tied to the theme. Zeno Mercer argues that investors are looking beyond the current capex wave in data centers and semis to a broader, longer-lived cycle that includes robotics, autonomous systems, edge AI, and other forms of distributed compute. He says the opportunity set will expand as AI moves from human-to-tech interaction toward machine-to-machine and physical-world applications, and he points to strong sales and earnings growth in the companies supporting that buildout.
Mercer also makes the case that investors should look past the Magnificent 7 if they want fuller AI exposure. He says a lot of the value is accruing to smaller and mid-cap names providing picks-and-shovels support, with technical leadership and valuation support still present outside the largest indices. He highlights edge AI, power management, signal processing, and energy efficiency as the next big investment wave.
Will Rhind then explains GraniteShares’ YieldBOOST ETFs, which use option spreads on volatile underlying names to generate weekly income. He says the funds are not leveraged ETFs, that the yield comes from option premium, and that any return of capital component is a tax classification rather than an effort to prop up payouts. Rhind argues the products fit investors seeking a secondary income stream and says demand for options-based ETFs is being driven by self-directed investing and the FIRE mindset.
Key takeaways
- Mercer says AI ETF adoption is still early, with many investors not even allocating 1% to the theme yet.
- Mercer argues the next AI winners may be outside the Magnificent 7, especially in robotics, edge AI, and infrastructure suppliers.
- Rhind says YieldBOOST ETFs use a bullish put spread and pay distributions weekly, with yields boosted by higher volatility in the underlying.
- Rhind says return of capital in YieldBOOST is a tax construct, not a sign the fund is selling assets to meet its payout target.
- Rhind says demand for options-based ETFs is being fueled by investors seeking a secondary income source beyond their job.
Notable quotes
“the tech stack of the future? It's energy, robotics, and AI”
“Yield Boost is our brand for optionsbased income ETFs”
“the yield boost secret source is you get two times the notional premium if it's an underlying two times levered ETF”
How the episode opens
You know, if you look at what percentage AI will be of uh GDP, um I don't think anyone disputes that it's going to continue to climb, not just from the infrastructure buildout, like like the maintenance and infrastructure side, but the opex side. All right, joining me will be Will Ryan, founder and CEO of Granite Shares, who is now over 10.5 billion dollars in assets. They have seen tremendous growth over the past several years.
And here more recently, a significant driver of that growth has been their yield boost lineup of ETFs. They now have 10 of these ETFs in all and some of these are offering nearly 150% annualized distributions, 150% such as the Granite Shares yield boost Coinbase ETF, ticker COY. They also have a uh Tesla one that has 140% annualized distribution rate.
And of course with these types of payouts that is going to catch the attention of investors, I would say especially retail investors. And so Will and I are going to have a full conversation around all of this. We'll go in depth on how these yield boost ETFs work.
We'll certainly talk about the risks involved with these products and whether Will has any concerns regarding retail investors getting their hands on these. And then we'll also get into some of the drivers behind the massive interest and optionsbased ETFs overall, which just continues to be one of the hottest ETF categories out there. Now, to start, I am joined by Zeno Mercer, senior research analyst at Vetify, who I always say Zeno is our resident technology expert, and in particular, he's absolutely our artificial intelligence expert.
And that's exactly what we're going to uh discuss this entire AI theme, which I'll say AI ETFs are also a hot ETF category right now.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- options-based etfs
- yieldboost strategy
- ai etfs
- fund flows
- etf performance trends
Companies and tickers mentioned
- GraniteShares
- VettaFi
Watch the episode
Watch “GraniteShares' Will Rhind on Rise of Options-Based ETFs” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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ETF Prime, this episode and its artwork belong to Nate Geraci. Octagon is not affiliated with the show; this page is an independent summary.
