My Exclusive QQQY Interview with Defiance CEO!

Summary

Sylvia Jablonsky, CEO and CIO of Defiance ETFs, discusses the company's unique approach to thematic ETF products that focus on innovations and technology. She highlights Defiance's strategy of selling short-term options to generate income and details the performance of their ETFs, such as QQQ and JY. Jablonsky emphasizes the importance of reinvesting dividends for optimal returns and shares insights on portfolio management, especially for retirees seeking income through alternative investments.

Takeaways

• 🌟 Sylvia Jablonsky is the CEO and CIO of Defiance ETFs, with a background in derivatives trading and experience at Direxion, the leveraged/inverse ETF company.
• 🚀 Defiance ETFs was founded in 2018 with the goal of launching thematic ETF products representing innovations and technology, targeting younger generations' investment interests.
• 💡 Defiance focuses on cost efficiency, aiming to be the least expensive in their thematic spaces, and offers thematic innovation and disruptive technology for the masses.
• 💰 The company has expanded its offerings to include ETFs that generate income through creative ways, partnering with firms like ZGA Financial and Title.
• 📈 The basic strategy of QQQ and JY involves selling slightly in-the-money puts daily, which settle to cash, generating a premium paid out to investors monthly.
• 📊 In a flat or sideways market, the strategy can yield high percentages in distributions, while in an upward market, it captures some upside but caps the gains due to the strike price.
• 📉 On the downside, the strategy tends to perform better as the put income offsets losses in the underlying index, making it suitable for investors looking for income rather than pure equity exposure.
• 🔄 Reinvesting the dividends from these ETFs is crucial for optimal performance, as it allows investors to benefit from the compounding effect and mitigate the impact of NAV fluctuations.
• 🔄 The company has learned that retail investor interest and discussions about their products have been beneficial, and that the total return, including dividends, is a more accurate reflection of the fund's performance.
• 🔄 Defiance ETFs are suitable for investors looking to diversify their income sources and are open to exploring alternative investments beyond traditional equity and bond portfolios.

Q & A

What is Sylvia Jablonsky's role at Defiance ETFs?

Sylvia Jablonsky is the CEO and CIO of Defiance ETFs.

How does Defiance ETFs differentiate from traditional financial products?

Defiance ETFs differentiates by launching thematic ETF products that represent innovations and technology, targeting younger generations with a focus on thematic innovation and disruptive technology for the masses.

What was the initial strategy behind the launch of Defiance ETFs?

The initial strategy was to offer products that were cost-efficient and provided access to innovative technologies like 5G, Quantum Computing, and Hydrogen ETFs, aiming to cater to a different demographic than traditional financial products.

How does the QQQ ETF generate income for investors?

The QQQ ETF generates income by selling slightly in-the-money puts daily, which settle to cash within a short period, and then distributes the collected premium to investors at the end of the month.

What is the basic strategy behind the QQQ ETF?

The basic strategy involves selling daily zero DTE options (slightly in-the-money puts) to collect a premium, which is then paid out to investors monthly, while also benefiting from any upside in the index itself.

How does market volatility affect the performance of the QQQ ETF?

During times of high market volatility, the QQQ ETF can generate more premium from selling options, which can offset potential losses in the underlying index. Conversely, in flat or sideways markets, the premium collected daily can result in high distribution rates.

What is the significance of reinvesting dividends in the context of the QQQ ETF?

Reinvesting dividends is key to enhancing the performance of the QQQ ETF, as it allows investors to consistently buy shares at a lower price, leading to a better overall return on investment.

How does the performance of the QQQ ETF compare to the NASDAQ?

While the QQQ ETF aims to provide income and steady index performance, it is not designed to directly compare or compete with the NASDAQ. The QQQ's goal is to provide outsized income rather than pure equity risk exposure.

What is the role of the adviser in managing the QQQ ETF during market downturns?

The adviser has the discretion to manage the options strategy within the fund, but they are not bound to specific strike prices. They aim to capture the highest amount of premium daily, but the fund's performance is still subject to market risks.

What is the impact of market conditions on the premium generated by the QQQ ETF?

Market conditions significantly affect the premium generated. For instance, during periods of increased fear or market downturns, the premium can spike, offsetting some losses in the underlying index. Conversely, during holidays or low volatility periods, premium generation may be slim.