What You May Have Missed This Week...

Temporary fee waivers have brought the current expense ratio on many bitcoin ETFs down to 0% for the time being.

As it stands currently, Fidelity, VanEck, Invesco, Franklin and WisdomTree are currently waiving all fees based on the criteria laid out by them. Grayscale has been charging the full 1.50% this whole time. iShares, ARK, Bitwise and Valkyrie have either surpassed the asset thresholds for waiving fees or the fee waiver period has run out.

But we can't just look at the expense ratio. We have to consider the "total cost of ownership", which looks at the expense ratio plus trading costs.

The Global X Nasdaq 100 Covered Call ETF (QYLD) and the Global X S&P 500 Covered Call ETF (XYLD) were among the first buy/write option income ETFs in the marketplace and, for a while at least, were the biggest. They're still very popular among income seekers looking for straightforward index coverage with a 100% option overlay strategy.

But yields have dipped a bit recently, although they're still among the highest yielding options in the covered call space. QYLD is currently paying an annualized yield of 11.5%, while XYLD has shrunk to 9.9%. To understand if this is anything that income seekers should be concerned about requires a breakdown of the fund's strategy and its return profile.

State Street is unquestionably one of the ETF industry heavyweights. It manages more than $1.2 trillion dollars of investor money across nearly 100 different funds, two dozen of which have expense ratios of less than 0.10%.

The SPDR lineup has almost everything an investor would need. Its broad market funds cover large-, mid- and small-caps. They offer 30 different sector-level ETFs that allow for easily tilting towards any particular area of the market. Fixed income market coverage is expansive and there are additional offerings within commodities, thematics and target risk strategies.

The Pacer U.S. Cash Cows 100 ETF (COWZ) has been around since December 2016. Its strategy is backed by years of history and study confirming that companies that do a better job of generating free cash flow produce better returns.

Today, Pacer is now firmly on the ETF marketplace map. It operates nearly 50 ETFs with COWZ residing as the tentpole of its "cash cow" strategy lineup. Even though it's the largest, COWZ might not be Pacer's best ETF. In fact, it might not even be the best "cash cow" ETF in the lineup! In my opinion, that title goes to the Pacer Cash Cows Fund of Funds ETF (HERD).

One trend that has emerged in the ETF industry to fill in the high yield gap is what I'll label "covered calls on steroids" strategies. Prior to their launch, a double digit yield in the range of 10-12% was about as high as you could reasonably hope for. Now, some of these products are pumping out 50% yields and even higher.

One fund that uses the 0DTE strategy is the Defiance S&P 500 Enhanced Option Income ETF (JEPY). Looking at just the ticker, you might assume that this fund uses JEPI as its foundation and then ramps up the option writing activity. In reality, the funds are quite different from each other.

The stock market finally experienced a setback in April as inflation began to re-accelerate and Q1 GDP growth came in far lower than expected. On top of that, the timing for a Fed rate cutting cycle continues to get pushed back to the point where there's a real possibility we may see no rate cut in 2024 at all.

I do think the cautious tone will continue to hang over the market though. If inflation continues to remain elevated and the Fed gives no signs that rate cuts are coming, investors may decide that riskier isn't better and remain more cautious, especially if labor market data starts showing more cracks.

If you've followed me for a while, you'll know that I'm not really the biggest fan of the Vanguard High Dividend Yield ETF (VYM). That's not to say that it doesn't check a lot of the boxes. Its ultra-cheap 0.06% expense ratio was one of the lowest you'll find and its $53 billion asset base ensures that it's highly liquid and tradeable. VYM currently ranks #2 on my quantitatively-driven list of the best dividend ETFs.

That doesn't mean that VYM isn't useful though, especially in the context of retirement investing. In fact, the one thing that I find less appealing about VYM may actually be the thing that makes it more ideal as a retirement vehicle.

Let me explain...

Fidelity, as most of you already know, is one of the largest money managers in the world. In the ETF world, the company got a bit of a late start, but they're starting to gain ground now. Their first ETF, the Fidelity Nasdaq Composite ETF (ONEQ), was launched back in 2003, but it was another 10 years before they brought another one to market. Now, the company is up to 70 total ETFs and is the 11th largest ETF issuer.

There are a few funds that stand out to me as ideal for retirement investors.