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What is an Evolve Enhanced Yield (covered call) ETF?

An Evolve Enhanced Yield ETF holds an underlying portfolio (such as Canadian banks, US technology stocks, or global utilities) and writes covered call options on up to 33% of those holdings. The option premium income supplements the dividends or interest paid by the underlying portfolio.

Examples include BANK (Canadian banks and insurance), UTES (Canadian utilities), ESPX (large-cap US equities), QQQY (NASDAQ technology), and LIFE (global healthcare). Covered call writing caps participation in rising markets above the strike price on the portion where calls are written, in exchange for premium income. The proportion of the portfolio on which calls are written, and the option strike and expiry conventions, are set out in each fund’s prospectus.

How does Evolve’s UltraYield strategy differ from Enhanced Yield?

Evolve’s UltraYield ETFs combine a covered call strategy on approximately 50% of the portfolio with modest leverage of 33% (1.33x NAV) and pay distributions twice per month. Enhanced Yield ETFs apply covered calls on up to 33% of the portfolio without leverage and typically pay monthly.

The UltraYield lineup includes BIGY (US equity), CANY (Canadian equity), INTY (international equity), SIXY (Canadian Big Six banks), and EASY (an all-in-one fund that initially invests in BIGY, CANY, and INTY). Leverage and an enhanced options strategy increase potential income but also increase risk; investors should review each fund’s prospectus and Management Report of Fund Performance.

Which Evolve ETFs use leverage?

Seven Evolve ETFs use leverage: five UltraYield ETFs — BIGY, CANY, INTY, SIXY, EASY (each 1.33x NAV with covered call strategy) — and two leveraged cryptocurrency ETFs — LBIT (1.25x daily bitcoin) and LETH (1.25x daily ether).

The remaining Evolve ETFs do not use leverage. Daily-reset leveraged ETFs (LBIT, LETH) reset their leverage exposure each trading day, which means returns over periods longer than one day can deviate from the stated leverage multiple due to compounding. Each fund’s prospectus describes how leverage is implemented and the associated risks.

How do Evolve’s cryptocurrency ETFs work?

Evolve offers seven cryptocurrency ETFs: EBIT (spot bitcoin), ETHR (spot ether), SOLA (spot solana), XRP (spot XRP), ETC (market-cap-weighted basket of bitcoin, ether, solana, and XRP), LBIT (1.25x daily levered bitcoin), and LETH (1.25x daily levered ether).

The single-asset and basket ETFs hold the underlying digital asset through regulated digital asset custodians, providing exchange-traded crypto exposure without requiring a wallet, exchange account, or private keys. LBIT and LETH gain leveraged exposure by investing in EBIT and ETHR respectively. All seven funds trade on the TSX and are eligible for registered accounts including RRSPs, TFSAs, and FHSAs. Leverage increases risk.

How does Evolve store the cryptocurrency held in its crypto ETFs?

Evolve’s cryptocurrency holdings are held by regulated digital asset custodians using cold storage (offline) wallets with institutional-grade security.

Specific custody arrangements, including the identity of the custodian for each fund, are disclosed in each fund’s prospectus. The custodian is independent from Evolve, and the underlying cryptocurrency is held on behalf of the fund’s unitholders rather than as a balance sheet asset of either Evolve or the custodian.

What is the difference between EBIT and LBIT?

EBIT (Evolve Bitcoin ETF) holds bitcoin directly to provide 1:1 exposure to its price. LBIT (Evolve Levered Bitcoin ETF) seeks 1.25x the daily price movement of bitcoin through daily-reset leverage.

Because LBIT’s leverage is reset daily, returns over periods longer than one day can deviate from 1.25x the underlying due to compounding — in volatile markets, this can produce a meaningfully different result than 1.25x the cumulative bitcoin return. Leverage increases risk. Evolve offers an equivalent leveraged structure for ether through LETH (Evolve Levered Ether ETF), which follows the same daily-reset mechanics.

What does Evolve offer for cash management?

Evolve offers four cash management ETFs across Canadian and US dollar mandates:

  • HISA — High Interest Savings Account Fund (CAD, Cboe Canada, monthly distributions)
  • MCAD — Premium Cash Management Fund (CAD money market, TSX, monthly)
  • HISU.U — US High Interest Savings Account Fund (USD, TSX, monthly USD distributions)
  • MUSD.U — US Premium Cash Management Fund (USD money market, TSX, monthly USD distributions)

Each fund’s current yield, holdings, and historical distributions are published on its individual fund page.

Does Evolve offer fixed income ETFs?

Yes. Evolve offers six fixed income and credit ETFs spanning actively managed and enhanced yield (covered call) strategies:

  • FIXD — Active Core Fixed Income Fund (actively managed, sub-advised by Addenda Capital)
  • EARN — Active Global Fixed Income Fund (sub-advised by Allianz Global Investors)
  • DIVS — Active Canadian Preferred Share Fund (sub-advised by Addenda Capital)
  • BOND — Enhanced Yield Bond Fund (covered calls on US-listed bond ETFs)
  • AGG — Canadian Aggregate Bond Enhanced Yield Fund
  • MIDB — Enhanced Yield Mid Term Bond Fund

Each fund’s mandate, sub-advisor (where applicable), current yield, and fees are published on its individual fund page.

What thematic ETFs does Evolve offer?

Evolve offers eight technology and thematic ETFs covering long-term innovation themes:

  • CYBR — Cyber Security Index Fund (Canada’s first cybersecurity ETF, launched September 2017)
  • HERO — E-Gaming Index ETF
  • CARS — Automobile Innovation Index Fund
  • DATA — Cloud Computing Index Fund
  • EDGE — Innovation Index Fund
  • TECH — FANGMA Index ETF (Facebook, Amazon, Netflix, Google, Microsoft, Apple)
  • ARTI — Artificial Intelligence Fund (sub-advised by Boosted.ai)
  • QQQT — NASDAQ Technology Index Fund

Each fund is listed on the TSX and tracks a published index, with the exception of ARTI which uses an actively managed AI strategy. Several themes are also available with an enhanced yield (covered call) overlay through funds in the Enhanced Yield lineup, including QQQY (NASDAQ technology) and LIFE (global healthcare).

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