GraniteShares YieldBOOST TSM ETF (TMYY)

The GraniteShares YieldBOOST TSM ETF (TMYY) holds shares of Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, and systematically sells call options on those shares — a strategy that generates additional income by capping the stock’s upside in exchange for monthly cash payments to shareholders.

A fund that owns the world’s most important chipmaker but sacrifices its highest gains to collect steady option premiums — the eternal trade-off between sleeping well and sleeping rich.

GraniteShares, a London-based ETF issuer owned by investment firm Silvercrest, specializes in options-based income strategies. The YieldBOOST line of funds applies this approach to individual stocks. TMYY is the fund’s TSMC variant — it buys and holds TSMC shares (traded as ADRs on U.S. exchanges) and then overlays a systematic covered-call strategy on top of that core holding.

A covered call works like this: you own the stock, and you agree to sell it at a higher price (the strike price) on a future date (the expiration). In exchange, the buyer of that call option pays you money upfront. If the stock stays below the strike, you keep the premium and own the shares, and you sell new calls at the next expiration. If the stock rises above the strike, your shares get called away and you book a gain up to the strike price, but you miss any appreciation beyond that level. The premium collected in the meantime becomes the “extra” yield.

For TMMC, this matters because TSMC is a single security — owning it outright exposes you to the full voltage of TSMC-specific risk and the broader semiconductor cycle. A large run-up in the chip cycle can make TSMC shares soar, but the covered calls would limit how much of that you capture. In flat or down markets, the option premium cushions the decline. Over a full market cycle, the strategy is designed to reduce volatility and generate extra income, at the cost of capping peak gains.

The fund implements this at a systematic level: every month (or every expiration period, as dictated by the options calendar), the managers sell new calls at a predetermined strike level relative to the stock price — typically slightly out of the money, meaning there is some room for the stock to appreciate before the calls are exercised. This regularity and discipline is what allows the fund to be structured as a simple ETF rather than a complex instrument. Investors get monthly distributions, the income component of which comes from the call premiums.

This strategy appeals to shareholders who are more interested in steady income from a high-quality company than in capital appreciation. TSMC is arguably the most critical company in the global semiconductor supply chain — no major semiconductor design is fabricated without it — so owning shares is a way to gain exposure to a structural trend in computing and artificial intelligence. But if you believe TSMC’s shares will trade sideways to modestly higher over the next several years, and you would rather collect monthly option income along the way than hold out for a doubling or tripling of the stock price, TMYY offers that bargain explicitly.

The real risks are the two-sided nature of options income strategies. In a severe market downturn, the call premium provides limited cushion — the fund could still lose 20% or 30% along with the stock. And in a breakout scenario where TSMC doubles over two years, TMYY shareholders participate only up to the successive strike prices they sold calls against, missing the most lucrative portion of the move. The strategy is best thought of as appropriate for an investor in the distribution phase of their life, or someone with a neutral-to-slightly-bullish view on TSMC, rather than a pure core holding for a long-term accumulator who expects the chipmaker to soar.

Tax treatment depends on the nature of the distributions: the option premiums are ordinary income, and any capital gains from covered calls that are exercised are short-term gains (taxed as ordinary income) unless the fund holds shares through specific calendar windows — a complex area that requires checking the fund’s annual tax statements to fully understand the after-tax impact.

How to research TMYY

Start with the fund’s prospectus and fact sheet from GraniteShares, which explain the covered-call methodology, the typical strike selection process, and how the fund handles options that expire in the money versus out of the money. Understand the current strike price relative to the stock’s trading price to see how much room for upside the fund has built in.

Compare TMYY’s monthly distributions and cumulative return to owning TSMC stock directly (or through a simple index fund) over rolling periods of one, three, and five years. This comparison reveals the true economic trade-off: how much extra yield did the covered-call strategy generate, and how much capital appreciation was sacrificed? Over a rising market, TMYY will lag; over a flat or declining market, it will often outperform due to the income buffer.

Review the fund’s holdings to confirm it is indeed holding TSMC ADRs (it should be nearly 100% TSMC). Check GraniteShares’ documentation for the options expiration schedule and how often calls are rolled. Monitor TSMC fundamentals separately — the chipmaker’s earnings reports, market share, and the cyclicality of semiconductor demand — since the fund’s performance is entirely dependent on TSMC’s business trajectory.

Finally, for anyone holding TMYY in a taxable account, collect the annual tax statement to understand whether the distributions are primarily qualified dividends, ordinary income from options, or capital gains, so you can calculate the true after-tax yield.