VistaShares launched its latest ETF, the VistaShares Target 15 Berkshire Select Income ETF OMAH, offering income investing and thematic equity exposures.

The trading symbol OMAH is a play on Warren Buffett's famous nickname, the “Oracle of Omaha.” This innovative fund blends the time-tested investment philosophy of Buffett with an actively managed options strategy designed to generate a significant monthly income.

OMAH is structured as a Berkshire Hathaway Inc BRK-inspired portfolio, comprising a focused selection of publicly disclosed Berkshire Hathaway investments, along with direct exposure to the company itself. The fund goes beyond traditional Buffett-style investing by incorporating an options strategy designed to achieve an annual income target of 15%, distributed at 1.25% per month.

According to Adam Patti, CEO of VistaShares, OMAH represents a first-of-its-kind approach. “To my knowledge, there is no fund in the market with a similar approach to OMAH,” he told Benzinga.

The ETF’s portfolio consists of BRK.B alongside its top 20 holdings, creating a well-diversified equity mix that mirrors Berkshire's largest investments. What sets OMAH apart is its actively managed options overlay, which seeks to generate substantial income, making it an attractive solution for Buffett-style investors and income seekers.

Also Read: Touchstone Launches TLCI ETF To Capitalize On Global Growth

A “Synthetic Dividend” For Berkshire Investors?

One of the most intriguing aspects of OMAH is its ability to provide monthly income from a portfolio that traditionally does not generate dividends. Given that Berkshire Hathaway does not distribute dividends, OMAH introduces something called a "synthetic dividend" for investors who have long wished for a steady cash flow from Buffett-style holdings.

“Our research indicates that BRK.B investors would be interested in carving off a portion of their existing exposure to layer in a similar equity profile with the added benefit of significant income generation,” Patti explained in an interview with Benzinga.

He emphasized investors could maintain a Berkshire-like portfolio while simultaneously benefiting from a substantial income stream, making OMAH a compelling alternative to simply holding BRK.B.

Who Should Consider OMAH?

OMAH caters to income-focused investors and long-term Buffett-style investors. For those accustomed to dividend-paying stocks or options-based income strategies, OMAH presents a fresh approach by pairing Buffett's well-regarded equity picks with a robust income component.

Meanwhile, BRK.B investors who seek to introduce a cash flow component into their portfolio may find OMAH an appealing complement to their existing holdings.

“For income-focused investors who typically look to options-based income ETFs or more traditional dividend strategies, OMAH offers a very different core equity exposure that has clearly resonated with investors for decades. OMAH also offers a robust monthly income stream which at 15% annually is quite attractive,” Patti noted.

Liquidity and Risk Mitigation

Given OMAH's reliance on options strategies, VistaShares partnered with Tidal Financial Group, a leader in ETF options strategies with an established track record in managing over $10 billion in similar products.

To address concerns about market volatility and risk management, Patti emphasized the options strategy is actively adjusted to maintain the fund's income target across different market conditions.

He clarified OMAH is not explicitly designed to provide downside protection, and investors should understand how the options overlay functions in varying market environments.

“The options team always has risk management front and center in how they manage the portfolio, and their tactics will be adjusted depending on the state of the market in order to best achieve their income targets regardless of market conditions,” he said.

Positioning In A Shifting Market Environment

As investors seek to de-risk portfolios while staying exposed to equities, Patti sees OMAH as an all-weather investment strategy that can help navigate today's uncertain economic climate.

“We believe the current market dynamics favor OMAH given its focus on emulating the Berkshire Hathaway investment portfolio, which has proven itself in all market conditions, with the significant added benefit of high monthly income,” he stated.

While the debate over value vs. growth investing continues, Patti believes OMAH is well-positioned regardless of market shifts. The fund's exposure to Berkshire Hathaway's holdings naturally includes value-oriented stocks and select growth opportunities, making it adaptable to evolving market trends.

“I don't believe growth is dead by any means. There is simply too much investment and technology-driven change to hold that back. That said, BRK.B and through that, OMAH certainly does have its share of traditional growth exposure, so I believe we are well positioned for whatever the market throws at us,” he added.

Filling a Market Gap

With the rising demand for thematic and options-based ETFs, Patti believes OMAH fits perfectly into an expanding space where investors are actively looking for well-constructed strategies backed by deep research.

“For issuers like VistaShares that are focused on well-researched, well-designed investment tools, we believe there is significant white space in the market,” Patti said.

“Our ETFs must achieve their stated goals and provide significant transparency into our investment process. OMAH is precisely the type of solution we are focused on — filling a gap in the market while offering multiple use cases for investors.”

The launch of OMAH represents a major step forward in the evolution of income-generating ETFs, providing a blend of Buffett-style investing and high monthly distributions. With a unique “synthetic dividend” approach, active risk management and a highly experienced options strategy team, OMAH aims to stand out as a core equity holding that delivers both capital appreciation and high monthly income, a rare combination in today's investing trends.

Read Next:

• Retail ETFs Anticipate Adjustments As Walgreens Prepares To Go Private

Photo: Shutterstock