FEPI: REX FANG & INNOVATION EQUITY PREMIUM INCOME ETF
ETF Education Report: REX FANG & INNOVATION EQUITY PREMIUM INCOME ETF (FEPI)
What this ETF is trying to do
The REX FANG & INNOVATION EQUITY PREMIUM INCOME ETF (FEPI) is an exchange-traded fund that focuses on generating income. It is classified as an "option income" ETF. This means it uses specific financial strategies to try to create cash for its investors.
What the numbers show
When looking at an ETF, it is important to separate the share price from the total return.
• Price Return: This measures only how much the share price has moved. For FEPI, the one-year price return was approximately -9.36%. The year-to-date (YTD) price return was approximately -5.42%.
• Total Return: This includes both the share price changes and the cash distributions paid out. Even though the share price went down, the one-year total return was approximately 17.14%, and the YTD total return was approximately 12.30%.
To visualize this, an estimated price from roughly one year ago was $47.53. The current price is $43.08. While the price itself has declined, the total return shows a positive result when including distributions.
Income and distribution explanation
FEPI has a high distribution yield of approximately 26.25%. This represents the cash distributions relative to the ETF's price. The fund typically pays out money monthly, with 26 distributions recorded over the last 12 months. It is important to remember that a high distribution yield does not mean an investor earned that same percentage as their total return.
Top Holdings
The following are the top holdings in this portfolio (note that this is a partial list):
• TESLA INC: 7.18%
• PALANTIR TECHNOLOGIES INC: 7.07%
• MICROSOFT CORP: 6.90%
• META PLATFORMS INC: 6.85%
• ORACLE CORP: 6.80%
• MICRON TECHNOLOGY INC: 6.77%
• NETFLIX INC: 6.77%
• APPLE INC: 6.70%
• NVIDIA CORP: 6.60%
• AMAZON.COM INC: 6.54%
NAV erosion explanation
"NAV erosion" refers to a decline in the Net Asset Value (the actual value of the fund's underlying assets). While a falling market price is not the same thing as NAV erosion, it can be a sign of it. FEPI has an erosion-risk score of 75, which is labeled as "Mild price erosion." This is a measurement of risk, not a guarantee that the value has been destroyed.
Pros
• The fund provides a high distribution yield for those seeking cash income.
• The total return has been positive over the last year, even though the share price fell.
Cons
• The share price has experienced a decline over the last year and year-to-date.
• There is a measurement of "mild" price erosion risk.
Beginner takeaway
High yields can be exciting, but they can also be misleading. An investor should look at both the price return (the cost of the shares) and the total return (the price plus the cash received). In the case of FEPI, the share price has gone down, but the total return has been positive due to the large distributions.
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | TESLA INC | TSLA | 7.18% |
| 2 | PALANTIR TECHNOLOGIES INC ORDINARY SHARES CLASS A | PLTR | 7.07% |
| 3 | MICROSOFT CORP | MSFT | 6.90% |
| 4 | META PLATFORMS INC CLASS A | META | 6.85% |
| 5 | ORACLE CORP | ORCL | 6.80% |
| 6 | MICRON TECHNOLOGY INC | MU | 6.77% |
| 7 | NETFLIX INC | NFLX | 6.77% |
| 8 | APPLE INC | AAPL | 6.70% |
| 9 | NVIDIA CORP | NVDA | 6.60% |
| 10 | AMAZON.COM INC | AMZN | 6.54% |