The combination of a middling Process Pillar rating and a Below Average People Pillar rating limit  REX FANG & Innovation Equity Prm Inc ETF to a Morningstar Medalist Rating of Neutral.  The portfolio maintains a cost advantage over competitors, priced within the second-lowest fee quintile among peers.  

 The strategy's management team is about as experienced as others, but due to other weaknesses, the strategy earns a Below Average People Pillar. The strategy merits an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an overweight liquidity exposure and momentum exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And momentum exposure is rooted in holding stocks currently on a winning streak. The strategy's parent firm has some investor-friendly attributes, like modest portfolio manager turnover, but it is held back by portfolio managers with limited tenures at the firm. As a result, the firm gets an Average Parent Pillar rating.

Analyst Rating

Tesla

NVIDIA

Apple

Micron Technology

Alphabet

Netflix

Amazon

Broadcom

Palo Alto Networks

Advanced Micro Devices

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. REX FANG & Innovation Equity Prm Inc ETF earns an Average Process Pillar rating. 

The leading factor in the rating is the firm's five-year retention rate of 100% over the period. A low expense ratio also contributes to the process, with fees ranking in its category's second-cheapest fifth. Higher fees detract from net returns, which gives this fund an advantage over those with higher costs. Lastly, the process is limited by the experience of the management team, which averages five years at this fund.

 This strategy, over time, has opted for larger market-cap companies, compared with others in the Technology Morningstar Category.  But in terms of investment style, it is on par with peers. Looking at additional factor exposure, this strategy has consistently tilted toward companies with relatively higher trading volumes in the last few years. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also demonstrated more exposure to high-momentum stocks over peers in recent years. Momentum strategies wager that market outperformers will continue to outperform, and laggards will continue to lag. Higher exposure to the former could mean the managers are overweighting stocks on winning streaks. Compared with category peers, the strategy also had more exposure to the Momentum factor in the most recent month. In addition, this strategy has exhibited a tilt toward higher-volatility stocks in these years, meaning companies that have a higher historical standard deviation of returns compared with peers. Such stocks tend to rise faster and fall harder than the broad market. High-volatility exposure contributes to stronger performance during bull markets, but often at the cost of losing more during downturns. In this month, the strategy also had more exposure to the Volatility factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in communication services and consumer cyclical relative to the category average by 10.3 and 9.1 percentage points, respectively. The sectors with low exposure compared to category peers are technology and industrials, underweight the average by 12.0 and 2.9 percentage points of assets, respectively. The strategy owns 15 securities and is relatively top-heavy. Of the strategy's assets, 69.7% are concentrated within the top 10 holdings, compared to the category’s 52.4% average.

Average

Process

REX FANG & Innovation Equity Prm Inc ETF earns a Below Average People Pillar rating. The team benefits from the fund's structure. It tracks an index, which is helpful because historical data, such as Morningstar's Active/Passive Barometer, finds that index funds have generally outperformed their active counterparts, especially over longer time periods. However, the rating is weakened by the turnover of talent across its parent firm. The firm's asset-weighted manager tenure of less than a year suggests it could do more to retain portfolio managers. The managers' failure to consistently outperform peers at the funds they run, as measured by their combined three-year manager excess returns, also holds the rating back.


None of the managers here invest any money in the strategy, which is disappointing, as such investments help align managers' interests with fundholders.

Below Average

People

Even though REX Advisor's limited history of five months as a firm is working against its rating, they've proven to be an industry-standard steward, warranting an Average Parent Pillar rating. The firm currently manages 20 vehicles, with a total of $160.9 million under management across a team of two portfolio managers.  The firm's earliest portfolio manager hire, Austin Wen, has seven years of industry experience albeit with limited success on other strategies. 
 
   

 As REX Advisor builds and continues to develop a track record, its rating will be adjusted accordingly.

Parent

REX FANG & Innovation Equity Premium Income ETF

FEPI is actively managed, seeking to provide similar returns as the Solactive FANG Innovation Index and monthly income. The fund invests in the securities comprising the index while writing call options on them.

REX FANG & Innovation Equity Premium Income ETF (FEPI) combines the growth potential of large tech companies with income generation from covered call strategies.

FEPI: A Covered Call High Yield Tech Play

Investors focused on income and dividends have struggled to find low and medium-risk investments that offer steady payouts. REX FANG & Innovation Equity Premium Income ETF has provided a total return of 13.87% since its inception in October 2023. FEPI uses a strategy of owning big-cap technology stocks and selling monthly out-of-the-money calls to generate income.

FEPI: This Fund Has A Great Strategy For Investors Seeking Consistent Income

REX Fang & Innovation Equity Premium Income ETF is a covered call ETF that has performed well since its inception in November 2023. FEPI tracks a selected universe of stocks and sells out-of-the-money calls to generate income. There are some structural difference in the FEPI relative to other more conventional covered call ETF.

FEPI: Above Average Yielding Covered Call ETF With A Nuanced Focus

FEPI is a covered call ETF focusing on select growth and tech stocks. Although the fund offers investors a sky-high 25.9% yield and has outperformed since inception, risks seem excessive. JEPQ is a similar fund, with greater diversification, and an overall stronger value proposition.

FEPI: Good Covered Call ETF, But Better Choices Are Out There

REX Fang & Innovation Equity Premium Income ETF has achieved a 25% annualized yield in its first 3 months, raising its distributions each month. FEPI has seen both high yield and share price appreciation, outperforming other covered call funds and the overall market which is very rare for these types of funds. The fund's success can be attributed to its holdings of big tech stocks, actively managed out-of-the-money covered calls, and writing calls on individual stocks rather than the index.

FEPI: So Far So Good

First Trust S-Network Streaming and Gaming ETF

MicroSectors FANG+ ETN

Invesco Next Gen Media and Gaming ETF

Netflix logged its best weekly performance in over a year last week on upbeat outlook and strong subscriber growth in Q4 of 2023. However, since the stock looks pricey at the current level, investors may play Netflix-heavy ETFs to tap the winning momentum.

Netflix Logs Best Week Since 2022: ETFs to Buy on High Momentum?

The streaming giant Netflix (NFLX) reported mixed Q4 results. But it added strong subscriber base and offered moderately upbeat guidance.

Netflix Shares Surge Post Earnings: ETFs in Focus

The pioneer in the streaming space Netflix (NFLX) is scheduled to report fourth-quarter 2023 results on Jan 23 after market close.

Will Netflix Beat or Miss on Q4 Earnings? ETFs in Focus

REX FANG & Innovation Equity Premium Income ETF is a new covered call fund that holds 15 big tech stocks on the Nasdaq and writes covered calls against each stock. The fund's approach of writing covered calls against individual stocks rather than indices allows for higher yields due to the higher volatility of single stocks. The fund has the potential to generate yields of 2-3x more than funds that write covered calls against indices.

FEPI: This New Covered Call Fund Shows Some Potential

MIAMI--(BUSINESS WIRE)--REX Shares (“REX”), a leader in exchange-traded products, announces the launch of the REX FANG & Innovation Equity Premium Income ETF (Nasdaq: FEPI). This groundbreaking ETF is designed to provide exposure to innovative, large-cap technology stocks along with the potential for high monthly income using a sophisticated covered call strategy. FEPI offers investors unique access to the 15 biggest US technology stocks through the FANG & Innovation Index, and seeks to.

News for REX FANG & Innovation Equity Premium Income ETF ETF (FEPI)