Blaster ETFs?

There was a good bit of chatter during the week as the number of ETFs now exceeds the number of individual stocks and here is a list of filings of crypto ETFs that the Bloomberg guys have been talking about which is a path to far more ETFs than stocks.

It really isn't a big deal that there are more ETFs than individual stocks. According to Copilot, in 2000 there were over 8000 mutual funds which far exceeded the number of stocks so this isn't new. All the companies falling over each other to offer 2x, inverse 1x, inverse 2x, covered call and so on sort of inflates the head count. The image of filings looks like the same 2x, inverse 1x, inverse 2x, covered call and so on for the 20-30 largest cryptocurrencies which is a path to many more ETFs than individual stocks. 

We obviously have a lot of fun here looking at these types of funds. The ideas are interesting and while I can't see using any of the crazy high yielding funds in a substantial way I do think there is some merit to barbelling yield from a small slice in some sort drawdown portfolio. 

I am convinced there is a way to bundle higher income without the serious flaws that the current roster of funds have. Tuttle's latest filing does something sort of different. We've talked several times before about the Overlay Shares Large Cap ETF (OVL). It owns an S&P 500 ETF and sells put spreads for income. It is not a crazy high yielder, yielding just over 3% versus 1.2% for the the S&P 500. 

On a total return basis, OVL has consistently outperformed but the drawdowns have been larger too. Selling put spreads is a bullish strategy so there is a leverage component here but that leverage hasn't caused any catastrophic declines versus the plain vanilla S&P 500.

Tuttle's filing is for a lot of funds under the name Income Blaster which will go synthetically long (long call and short put) individual stocks or very narrow themes and then sell put spreads on those individual stocks/narrow themes. For example, there's one in the filing for Coinbase and one that tracks a robotics ETF. The intended outcome is that they generate income without capping the upside the way funds that derive income by selling calls do. 

I have no idea if these are the answer but we will follow them here if they ever make it to the market. 

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