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Direxion launches NVDA income ETF designed for twice-monthly payouts
The Direxion NVDA Defined Income Boost ETF, NVIB, targets a 20% annual distribution yield by using options tied to Nvidia’s volatility.
ETF Trends highlights Direxion’s launch of the Direxion NVDA Defined Income Boost ETF, NVIB, as a new way for investors to pursue income from Nvidia without relying on the stock’s relatively small dividend yield of 0.44%. Nvidia earlier this year increased its quarterly dividend by 2,400% to 25 cents a share, up from a penny.
NVIB is part of a six-ETF suite launched by Direxion in late July, with four of the new options-based funds linked to Magnificent Seven stocks. The ETFs are designed to deliver twice-monthly payouts, aiming to create a steadier income stream for shareholders.
According to ETF Trends, NVIB targets a 20% annual distribution yield and is structured to tap into Nvidia’s stock volatility, while also offering potential, though not guaranteed, participation in upside. The article also notes that the strategy is relevant as Nvidia remains a major U.S. market bellwether.
ETF Trends points to Nvidia’s recent purchase of Hugging Face, a large language model platform, for $12.9 billion. While it described the deal as not a near-term financial needle-mover, it said the acquisition could pay off over the long term, potentially reinforcing Nvidia’s AI positioning. Morningstar analyst Brian Colello is cited saying it seems unlikely builders will move off Hugging Face now that it is owned by a large company, though risk is plausible if Nvidia tilts toward itself.