About Purpose Investments Inc.

In December 2012, Purpose Investments Inc was founded. is an asset management company that manages assets worth close to $17 billion.Purpose provides a variety of outcome-focused products and relentlessly focuses on client-centric innovation. A branch of Purpose Financial, an independent technology-driven financial services company, Purpose Investments is run by well-known entrepreneur SomSeif. Purpose Financial officially changes its name to Purpose Unlimited to reflect its unwavering commitment to moving the industry forward.

Founded	2012	Contact	info@purpose-unlimited.com Toll Free: 1.877.789.1517 Tel: 416.583.3850
Founder	SOM SEIF	Headquarter	130 Adelaide St. West, Suite 3100  Toronto, ON  M5H 3P5
Website	ww.purposeinvest.com	Type	Privately Held
Twitter	Click here	Linkedin	Click here

On the Toronto Stock Exchange, the Purpose Bitcoin Yield ETF is listed under three different tickers:

BTCY-purchased with Canadian money and covered against exposure to US money.

TICKER	BTCY	Option Available	No
ISIN	CA74642T1057	Chart	Click here
Bloomberg	BTCY CN Equity	Expense ratio	1.10%
Currency Hedged	Yes	Leverage	No
Base currency	CAD	Fund structure	Open-end Fund

BTCY.B-Also bought using Canadian dollars, but does not act as a hedge against changes in the US dollar.

TICKER	BTCY.B	Option Available	No
ISIN	CA74642C2013	Chart	Click here
Bloomberg	BTCC/B CN Equity	Expense ratio	1.10%
Currency Hedged	Yes	Leverage	No
Base currency	CAD	Fund structure	Open-end Fund

BTCY.U-is purchased with US dollars, allowing investors to hold Bitcoin in USD.

TICKER	BTCY.U	Option Available	No
ISIN	CA74642C3003	Chart	Click here
Bloomberg	BTCC/U CN Equity	Expense ratio	1.10%
Currency Hedged	No	Leverage	No
Base currency	USD	Fund structure	Open-end Fund

how covered calls work?

Take this as a case study.  Let’s say you have 100 Bitcoin that you purchased for $ 20,000 each.  You want to keep Bitcoin because of its potential in the future.  However, Bitcoin eventually enters a consolidation mode and frequently encounters a difficult barrier near the $25000 mark.  You then visit the derivatives market and write Call options for the near-month series for the 100 Bitcoin you currently own, at let’s say $200 each, at $25000 each.

therefore, you make $20,000. ($200 X 100).  Now, if the price of Bitcoin at expiration is at or below $25000, you will have successfully earned a decent return on the money you have previously blocked in your portfolio.  An investor locks in the upside of the underlying asset when he sells a call option against it.  An investor attempts to capture the constrained upside in an underlying asset and keep the option premium by executing a covered call.

Another example.  Let’s say a trader sells a Bitcoin call option for $200 at $25000 while holding Bitcoin at $20000.  The upside gain on the underlying asset is limited to $5000 if Bitcoin increases over $25000 (since the investor sold the Call Option at $25000) plus the $200 premium he already received from selling the option.  The overall gain in this instance is $5200.

Income is generated by writing (selling) a call since the market player receives a premium for doing so.  When the market is going sideways with a positive undertone, covered calls are typically used.   You might write a call option in some circumstances, but the Bitcoin might rise significantly above the strike price.  In that situation, it can somewhat restrict your ability to profit.  The majority of the time, the covered call strategy for Bitcoin trades in a range.

However, Covered Call works in an upturn since Bitcoin often increase in value over a longer time frame.  Avoid covered calls if the market is in a corrective phase since the premium collected could not be enough to offset the underlying Bitcoin correction, which could result in losses.

However, this strategy can be used to hedge a portfolio.

Consider purchasing bitcoin at a price of $50000 each in the hypothetical event that the Bitcoin increases to $60000.  He then writes a call option with a strike price of $55000 and earns $6000 in premium to establish a covered call.The Bitcoin now drops to $40000.  Due to the Covered Call strategy, his or her loss will be minimised from an initial loss of $5000 to just $4000.

Where Does the Purpose Bitcoin Yield ETF?

The ETF invests mainly in BTCC holds Purpose Bitcoin ETF, providing exposure to the spot price of Bitcoin without the need of futures contracts (or Bitcoin).

On 10% to 50% of the portfolio, overwrite covered call options.

The yield is produced by selling covered call options on the underlying Bitcoin and taking the premium that goes along with them.

Who should put money into this fund? 

Investors who want exposure to Bitcoin and daily price swings in USD or CAD must be willing to accept a high level of investment risk, be able to take a loss on all or part of their investment, and hold their investment for a long period (i.e. you have the capacity to absorb a loss of some or all of your investment).

How NAV is calculated?

Like mutual funds, ETFs have a net asset value (NAV). It is calculated after the close of each trading day and reflects the value of an ETF’s investments at that time. How the securities of a fund are valued The units of each fund are divided into several kinds. Each class is divided into units of equal worth. When you buy a fund, you are actually buying units of the fund’s specific class.

Purpose Bitcoin Yield ETF Details.

Issuer	Purpose Investments Inc.	prospectus	Click here
VALUATION AGENT	CIBC Mellon Global Securities Services Company	Custodian	CIBC Mellon Trust Company Toronto, Ontario.
AUDITOR	Ernst & Young LLP	Registrar and Transfer Agent of the ETF Units	TSX Trust Company
Management strategy	Actively managed	Exchange	Toronto Stock Exchange
Legal structure	ETF	MINIMUM INVESTMENT	NO
Fund Facts	Click here	Brochure	Click here
ETF Facts	Click here	Fund Manager	Greg Taylor,Nawan Butt
Fund currency	CAD & USD	Jurisdiction	Canada
Registrar and Transfer Agent of the mutual fund units:	CIBC Mellon Global Securities Services Company	Holding	Purpose Bitcoin ETF,Call Options Written
Investment Advisor	Neuberger Berman Canada ULC Toronto, Ontari	Securities Lending Agent	The Bank of New York Mellon New York, New York
Inception/ Listing Date	November 19, 2021	Total Expense Ratio	1.10%

When to Invest in Covered Call ETF.

When it is expected that the price of the Bitcoin will move sideways or slightly downward for some time, buying a covered call ETF might be a smart decision.In addition, investors should consider using the technique anytime they find it intriguing, are ready to take a chance on boosting their portfolios’ returns, and aren’t worried about missing out on far higher rewards if the market rises.

People who are approaching retirement, those who are typically more risk-averse, or anyone wishing to increase their portfolio’s income without having to learn how to write and trade options may find ETFs to be appealing.

When to Avoid Purchasing a Covered Call ETF.

When cryptocurrency prices are generally rising and setting new records on a regular basis, that might be the one time not to purchase a covered call ETF. In this case, covered call ETF would perform worse than the rest of the market.

Benefits and Drawbacks of Covered Call ETF.

The following are the primary advantages of using an ETF covered call strategy:

Reduced risk and higher income.

Are the High Yields on BTCY ETF Sustainable?

No one can guarantee the safety of any investment, but we can make assumptions based on the various estimations we have. Profits from market volatility are realised with covered call options. The likelihood of profiting and the amount of the profit both increase with volatility. This is what makes it possible for ETFs like BTCY to offer such enormous gains. Cryptocurrencies tend to exhibit the highest levels of volatility of any asset class, which is one thing that is certain about them.

Benefits of a Covered Call ETF.

Overall, holding the underlying cryptocurrency has a similar risk profile to a covered call ETF. However, some investors believe that these ETF are less risky than holding individual cryptocurrencies because, in most cases, the ETF should perform at least as well as the market. (The only exception would be when there is a long and robust bull market.) Although covered call ETF offer additional income while lowering the danger of holding a lot of cryptocurrency, it is recommended to use put options to protect against negative risk.

Drawbacks of a Covered Call ETF.

Because covered call ETF are actively managed rather than passively tracking an index, their expense ratios are typically higher. But the extra money earned might be able to cover that expense.