ETF Watch List: GPTY, SOXY & CHPY

All right. Kevin, thank you. It's time now for our ETF watchlist segment. Joining me right now familiar face on Wall Street. Mike co chief strategist at yield Max ETFs. Thank you so much for being with us. I know you're talking so much about the volatility we've seen in AI and in tech. And look I mean you have tech names leading. I see Palantir and Zebra and Marvell SanDisk Lumentum. Everything is involved in tech in some way right. Intel. These are some of the great performers here up 10% or more today. What do you make of it though. The volatility we've been seeing. Well I mean obviously we had some big news last week and that kind of affected the entire AI complex. As you know we have two sort of areas or sector focuses that, you know target this area. So one is our AI and technology fund, which is GPTY. And then our other ones are stocks and chippy, which focus on the on the semiconductors. Now of course, there's a lot of crossover between these two. And, you know, the Broadcom's, the AMD's and Nvidia's, those are going to end up in both categories. The hyperscalers are really more of just a strict AI play for those people, less hardware focused. And then you've got things like C three, AI and hut eight and, you know, cipher stuff like that. Now, I mean, because of what we saw last week, we saw big, big Whipsaws. And then the news that came out of Palantir today, obviously very positive. That's another one of our, our holdings. The thing for us is that when volatility goes up, options premiums go up. Kind of like when you see the S&P go down, the VIX goes up. Just a measure of options prices for us because we typically sell option strategies. We don't mind it so much if there's some volatility as long as the general trend is positive. But if it's chopping around that's okay with us. Yeah. And I think about your options income strategies. And so you have to balance what's going on the volatility in AI. So let's talk more about GPTY. As you noted some of the big names that are in there. I'm seeing Microsoft and Apple and IBM. You talked about Palantir. This is actively managed using option strategies, right? Just at this point now, how often are you updating this? What is actively managed mean for this particular name? Are you changing the names in there or are you, you know, updating the trades often? Tell me a little bit about the active management of GPTY. Yeah. So that's that's an excellent question. There's really two parts of the active management process. One is what you were just alluding to, which is the security selection, what comprises sort of the AI and technology space and what stocks are we looking for exposure to? Because when you're looking at a fund like this, we are going to have long exposure to those underlying stocks. The more dynamic piece is going to be the options overlay. First of all, options expire. So as they expire you have to adjust them. Stocks move around, and as the stocks move around you need to adjust the option strategy. So the option strategies are actively managed, meaning that they could be adjusted as much as daily depending on both the price action and the underlying stock, and also the upcoming expirations. But the underpinning group of stocks, you know, the investment committee that's selecting those, that's going to be probably a little bit more static. New names are coming on the scene. Others may drift off, but but the underpinning group of stocks is going to be a lot more stable than the options positions will be. Yeah. And it's interesting. You could even have a one day options can be long or short. And as you noted, I mean, they could be very volatile or just short lived. Let's talk about socks and chippy. You know, the socks itself. When we look at that index, their year to date up 80%. You know, we could look at SMH2 to sort of tell us more of the story, but what do you think? I mean, the one month was not so pretty. What's going on with your SOXY in the semiconductor world. So socks and chippy have very similar underlying holdings. The principal difference between them is how aggressively they seek to harvest options premium and then distribute that and how regularly. So socks is what we call a target 12. That means we're looking to pay out about 1% per month in terms of options income, whereas chippy is looking to sort of maximize the options income and pays it out more regularly. But the underpinning group of stocks is essentially the same. The total returns for both is also essentially the same. It's just that one pays out more aggressively. So if you're looking just at a price chart, you're going to see that socks price has risen more because it's paid out less than chippy has, but both have performed essentially. You mentioned SMH. Both have performed essentially in line over the last year with that one. Yeah. I mean, you know, we've been talking about a lot of the movers AMD in focus too. I saw Marvell on the move. I was covering that a little bit. That's up almost 14% right now. We're waiting to hear more from AMD. I mean what do you think about some of these names when you think about the names and maybe the best, not the best performers, but the biggest holdings, the leaders, the ones that you have on the top of this because you said they hold similar names. Yeah. That's right. The biggest holdings. Well, so I mean, of course you're going to have Nvidia Broadcom, AMD micron. Those are all going to be top holdings. Look you know when you look at that basket of stocks the most important thing is CapEx. Are the hyperscalers slowing CapEx or are they increasing CapEx. And so far we haven't seen a single cut. On the CapEx side. You had some thoughtful interviews a little earlier. I saw, you know, about AMD and some other things. And so, you know, I think our general view is that is positive on this space because we just don't see a slowdown in spending just yet. The only thing that concerns me, if anything at all, is just, it seems like the the bar is set very high. Expectations are high. You have the you know, if you meet your numbers, that's probably not going to be good enough. We are seeing some pretty big implied moves in several several names, space X, which is, you know, coming out this week, that one was implying a 16.5% move. And even stocks that don't typically move that much like in the hyperscaler space. Look what happened to Microsoft last week. I mean, that was the largest move we've seen basically since you and I have watched it. We've been watching it a while, haven't we? And look, I mean, I will say that the big tech overall, we talked about 600, then 800 billion, then 1.2 trillion. And that's probably around where we are now that that AI bet could ignite the next semiconductor ETF rally, according to Bank of America. They talked about some of these names that are all buy rated, and that they have some of the ones that you're talking about here, like Nvidia and Marvell and Micron and Broadcom, they think they have 30% upside because of the compute and memory networking, the equipment. That's all needed rather than just solely Nvidia. Well here's the thing. This entire complex is absorbing whole percentage points of U.S. GDP each year. Now that's how staggering it is. You know, you take a look at Alphabet's CapEx and it's closing on 300 billion for next year. These are big, big numbers, Mike. Thank you.