# ZPAY



## dubmac (Jan 9, 2011)

Hi all. 

I'm investigating ZPAY as a possible add to a portfolio that I want some broad contributions in sources of income. ZPAY is classed a high yield US Equity ETF. (I am aware that "high yield anything" should raise yellow flags - I don't mind some of the associated volatility). very limited history on this Etf - it hs not been around very long. A closer look at the ETF reveals a rather weird collection of holdings - 2/3 of this appears to be in US T-bills, the rest in FANG, tech and financials. The price bounces around 29-31, but it did not drop significantly on March 25 2020 (the pit of the pandemic). It has recovered in price and kicks out 5.9% (0.15) per month.

Is this one a pyramid scam? Are distributions funded by invested capital, or drawn from investor capital? How would you determine this - (likely by evaluating statements - but what does one look for in the statements?
How can one establish whether the distributions are sustainable?


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## Topo (Aug 31, 2019)

It is not "high yield", but what they call "premium yield". Basically they are taking high quality stocks and paying a yield on the covered calls they sell against them. It has been around for less than one year, but my guess is that it may have held a lot of cash during the downturn, which along with the covered calls, cushioned the plunge in the stock component. It is also possible that the cash was the result of the calls being exercised after the recovery. As it stands now, an investor would be paying 0.72% MER for a 63% cash holding. If you find the strategy appealing, buying 1/3 of a pure covered call/sell put ETF combined with 2/3 held in cash could reduce the MER.


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## Jimmy (May 19, 2017)

The easy way to view ZPAY is it follows the S&P 500 but w less sever peaks and drops due to the covered calls and put writes. Like a stock w a covered call you get less upside but collect the premium from the call for income.

Same on the downside. There is less downside as premium collected on the puts offsets the price drop.It did fall though about 19% in the crisis 











But if you want income this is great because you collect the 2 premiums.


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## dubmac (Jan 9, 2011)

this helps. thanks you 2 above.


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