Ethereum Exposure + High Income Potential = ETF Power Play [ETF Watch Video]

How EHY and ETTY deliver high income, diversification, and growth potential

In this episode, Christian Magoon dives into our groundbreaking Ethereum covered call ETFs, EHY and ETTY.  These ETFs are part of Amplify’s YieldSmart™ suite of advanced covered call options-based ETFs, learn how EHY and ETTY aim to: 

✔ Deliver consistent high income (ETTY targets 36% and EHY 50-80% in anticipated annualized option income.)
✔ Provide capital appreciation potential
✔ Diversify your portfolio with a low correlation asset

Tune In to Discover:
☑️What makes Ethereum unique as a digital asset
☑️Why volatility creates income opportunities
☑️The YieldSmart™  strategies of ETTY & EHY

Related ETFs

• EHY: The Amplify  Ethereum Max Income Covered Call ETF
  Prospectus
• ETTY: Amplify Ethereum 3% Monthly Option Income ETF
  Prospectus

Additional Resources

• Ethereum Income ETFs
• Why Ethereum with Options: Ethereum Volatility Explained
• Ethereum Growth Drivers
• Asset Class Return Map
• Amplify ETFs Yields
• YieldSmart™ ETFs Video

Transcript: 

00:01
Welcome to Amplify's ETF Watch.
This week we're talking about two new ETFs we've launched that write covered calls on the cryptocurrency Ethereum, the Amplify Ethereum 3% Monthly Option Income ETF and the Amplify Ethereum Max Income Covered Call ETF.

So stick around as we learn more about Ethereum and understand these unique ETFs for income investors.

00:25
So what is Ethereum?

Ethereum is the second largest cryptocurrency behind Bitcoin in terms of market capitalization.
Bitcoin, however, is more of a store of value where Ethereum is a technology. Ether, the underlying cryptocurrency on the Ethereum blockchain, powers transactions, smart contracts, and decentralized applications.

00:48
You may have heard of Ethereum this year because of all the legislation happening with stablecoins. Ethereum is really the rails that stablecoins will be built on. This is a key technology and cryptocurrency that offers some very attractive investment characteristics.
Let's get into them.

01:06
First, from a diversification standpoint, Ethereum has a relatively low correlation to many asset classes, including the S&P 500, with a 0.25 correlation to the S&P 500 since 2017. Secondly, volatility is there for Ethereum. In fact, since 2017, Ethereum is five times more volatile than the S&P 500. This compares to Bitcoin being four times more volatile than the S&P 500. So there you have it, diversification as well as volatility makes Ethereum a great asset to implement a covered call income strategy on.

01:43
So let's take a look at how the Amplify Ethereum 3% monthly option income ETF actually works. First, the ETF buys long exposure to Ether through Ethereum ETPs and options. Remember, this ETF targets a 36% annual premium income, thus it sells weekly calls on a portion of the portfolio, which are somewhere between 5 to 10% out of the money to target this 36 annual option premium income while providing upside potential.
On a weekly basis, expiring covered call options are rolled to help generate ongoing option premiums. Finally, this ETF distributes income on a monthly basis.

02:26
Now let's take a look at the Amplify Ethereum Max Income Covered Call ETF as it functions differently. First, we buy long exposure to Ether through Ether ETPs and options. Then we sell weekly calls on all of the portfolio, 5 to 10% out of the money, to maximize income, yet still provide 5 to 10% Ether price upside potential on a weekly basis. Then, each week, we're rolling to replace expiring covered call options with new ones. Finally, like the majority of Amplify Income ETFs, we're paying distributions on a monthly basis.

03:04
And remember, increased price volatility provides the opportunity for increased option income potential, a great fit for Ethereum in a covered call ETF structure.
So for access to Ethereum's upside potential, as well as to harvest income along the way, check out Amplify's Ethereum covered call ETFs, which join our Bitcoin covered call ETFs as part of a growing family at Amplify.
Thanks for watching.

This is Christian Magoon for Amplify's ETF Watch.

The Funds do not invest directly in Ethereum. There is no guarantee distributions will be made. The annualized option premium may be significantly higher or lower than the stated range.

DEFINITIONS:  An option premium is the cost an option buyer pays to the seller for the right to trade an asset at a set price within a certain period. OTM means calls are written using an out of the money strategy.

The S&P500 index tracks the performance of 500 leading US companies. The Bloomberg Ethereum Index (ETH) is designed to measure the performance of a single Ether traded in USD. Volatility is the annualized standard deviation of the relative price change for the 10 most recent trading days closing price, expressed as a percentage. Standard Deviation is a statistical measure of the volatility of the fund’s returns. In general, the higher the standard deviation, the greater the volatility of the return.

Agg (Bloomberg US Agg Index tracks U.S. investment-grade, fixed-rate taxable bond market); Bitcoin (Bloomberg Bitcoin Index measures the performance of a single Bitcoin); Commodity (Dow Jones Commodity Index tracks 28 commodity futures contracts); Corporate (Bloomberg US Corporate Index tracks investment-grade, fixed-rate, taxable corporate bond market); Closed End (YLDATR, ISE High Income Index, measures the returns and income of the top 45 U.S.-listed Closed-End Funds); Equity Market (S&P 500 Index tracks 500 large-cap US companies); High Yield (Bloomberg US Corporate High Yield Index tracks U.S. high yield, fixed-rate corporate bond market); International (MSCI ACWI ex USA Index tracks non-US stocks from 22 developed markets and 24 emerging markets); Mid Cap (Russell Midcap Index measures the performance of the U.S. mid-cap segment); Silver (LBMA Silver Price tracks silver pricing); Small Cap (Russell 2000 Index tracks 2,000 small-cap companies); 10yr Treasury (Bloomberg US Treasury Bellwethers 10 Year tracks 10-year US Treasury securities).

Carefully consider the Fund’s investment objectives, risks, charges, and expenses before investing. This and other information can be found in the Fund’s statutory and summary prospectuses, which may be obtained at AmplifyETFs.com. Read the prospectus carefully before investing.

Investing involves risk and possible loss of principal. There is no guarantee the investment strategies will be successful. The Funds are considered to be non-diversified. The Funds are actively managed and their performance reflects the investment decisions that the Adviser makes for the Funds.

The Funds are exposed to significant risks through investments in Ether via Ethereum exchange traded products, futures and options. Ether is a highly speculative asset with a volatile market subject to rapid shifts, regulatory uncertainty, and adoption challenges. Issues such as slow transaction speeds, variable fees, and price swings amplify these risks.

Digital asset regulation remains unsettled, and trading of Ether ETP shares on U.S. exchanges may be halted due to market conditions or exchange discretion. Option prices are volatile and influenced by the underlying asset, interest and currency rates, and expected volatility - all shaped by political and economic policies. FLEX Options may be less liquid than standardized options, making timely exits difficult.

Covered call strategies may limit upside potential while still exposing the Funds to downside risk. Covered puts can incur substantial losses if the underlying asset rises sharply, with premiums offering limited protection. Monthly distributions may include return of capital, which lowers the investor's cost basis and could result in higher future taxes upon sale - even if shares are sold at a loss.

Amplify Investments LLC serves as the investment adviser to the Funds. Kelly Strategic Management, LLC and Penserra Capital Management LLC each serve as investment sub-advisers to the Funds.

Amplify ETFs are distributed by Foreside Fund Services, LLC.