ETF Education Report: USOY

The Defiance Oil Enhanced Options Income ETF (USOY) is an option-income ETF designed to generate high levels of cash distributions. It is characterized by a very high distribution yield and a frequent payout schedule.

What this ETF is trying to do

USOY uses an "enhanced options income" strategy. This means it uses options contracts to create income for investors rather than relying solely on the price of oil going up. Based on its holdings, the fund has exposure to the United States Oil fund (USO) and government obligations.

What the numbers show

As of September 23, 2026, the share price was $7.51.

Performance is measured in two different ways:

• Price Return: This measures only the change in the share price. The one-year price return was -7.28%, and the year-to-date (YTD) price return was 15.45%.

• Total Return: This reflects the overall return, including distributions. The one-year total return was 55.27%, and the YTD total return was 64.45%.

An estimated price from roughly one year ago was $8.10.

Income and distribution explanation

USOY provides very frequent distributions, paying out 52 times over the last 12 months (mostly on Thursdays). The trailing distributions totaled $3.86 per share, resulting in a distribution yield of approximately 51.38%.

It is important for beginners to remember that a high distribution yield alone can be misleading. It does not guarantee that the investor earned that percentage as a total return, nor does it guarantee that the original investment (the principal) is safe.

Price and NAV erosion explanation

The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

Regarding price-based evidence, USOY has an erosion-risk score of 75, which is labeled as "mild price erosion." This means there has been some deterioration in the share price, though the severe erosion-risk flag is currently false.

Pros

• High Income: The fund offers a very high distribution yield.

• Frequent Payouts: Investors receive cash distributions on a weekly-like basis.

• Strong Total Return: Despite a negative one-year price return, the total return was positive due to the distributions.

Cons

• Price Decline: The share price has declined over the past year.

• Erosion Risk: The fund has a "mild" price erosion label.

• Limited Holdings: The fund has a very small number of holdings.

Beginner takeaway

USOY is designed for investors seeking high, frequent cash income. While the total return has been strong, the share price itself has struggled over the last year. This highlights the difference between receiving a high distribution and seeing the share price grow.