Tuttle Capital Launches Digital Credit Preferred Income ETF

Tuttle Capital Management and its sub-adviser Strive Asset Management have launched the T-Strive Digital Credit Preferred Income ETF (DCAP), marking a new entry into the rapidly growing digital credit market. The ETF, listed on the CBOE BZX exchange, aims to provide investors with current income through investments in preferred securities issued by Bitcoin treasury companies.

DCAP is an actively managed ETF that seeks to generate income by investing in preferred securities issued by companies that hold Bitcoin as a core balance sheet asset. The fund will not directly invest in Bitcoin but will focus on preferred equity instruments issued by such companies. At inception, DCAP plans to concentrate its holdings in two issuers: Strategy Inc. (NASDAQ: MSTR) and Strive, Inc. (NASDAQ: ASST), with roughly equal allocations between their respective preferred securities, STRC and SATA.

The fund's investment strategy includes the use of tactical leverage, total return swaps, and written put options to strategically leverage the fund when the Digital Credit instruments trade below par. Tuttle Capital defines a Bitcoin treasury company as one that generally maintains 5% or more of its assets in Bitcoin or Bitcoin-linked financial instruments, or generally derives 5% or more of its income from them.

DCAP is classified as non-diversified and will be concentrated, holding 25% or more of its total assets in investments that provide exposure to Bitcoin treasury companies. The fund's total annual operating expenses are 0.95%, net of a contractual fee waiver that caps the management fee at 0.65% through September 30, 2027. Before the waiver, total annual operating expenses are 1.05%.

Strive Asset Management, founded in 2022 and based in Dallas, Texas, serves as the sub-adviser to the fund. The firm is a nearly $3B asset management affiliate of Strive, Inc. (NASDAQ: ASST), the issuer of the SATA preferred stock in which the fund invests.

The launch of DCAP comes as the digital credit market continues to grow, with a rising number of public companies adopting Bitcoin treasury strategies. These companies hold Bitcoin on their balance sheets as a long-term asset, and many have funded that strategy in part by issuing preferred stock directly to investors. DCAP is built to invest in that structured credit tranche by tying the Fund's return to the issuer's ability to pay dividends and honor its obligations, rather than to the day-to-day price of Bitcoin itself.

The fund is subject to various risks, including Bitcoin Treasury Companies Risk, Bitcoin Risk, Active Management Risk, Concentration Risk, Non-Diversification Risk, Issuer Credit Risk, Preferred Securities Risk, Derivatives Risk, Leveraging Risk, Written Put Options Risk, Conflicts of Interest Risk, Interest Rate Risk, Credit Risk, Call Risk, Income Risk, New Fund Risk, Cyber Security Risk, and the standard ETF Risks, among others.