Harvest ETFs manages approximately $12.5 billion across three core business lines as at July 2, 2026. The largest is our Income Leaders™ ETF suite, each contains 20-30 large cap stocks across sectors with covered calls on up to 33% of the portfolio. We also have our Specialty & Multi-Asset strategies. And, finally, our High Income Shares suite, which includes over 50 ETF tickers holding single stocks with covered call strategies, alongside several diversified ETFs focused on higher-growth names.
The Harvest Strategy Inc. High Income Shares ETF (TSX: MSTY)launched on January 16, 2025. MSTY invests in shares of Strategy (formerly MicroStrategy) and is overlaid with an active covered call writing strategy. Following that, we launched the Harvest Strategy Inc. Enhanced High Income Shares ETF (TSX: MSTE) on March 5, 2025. MSTE also invests in Strategy Inc. (MSTR), overlaid with covered calls, and employs modest leverage of approximately 25%.
It is important for investors to understand what has occurred in the many months following the launches of MSTY and MSTE. Here are the top ten questions asked about MSTE and MSTY:
1. What is MSTR (Strategy)?
MSTR is a publicly listed U.S. company. In August 2020, Strategy invested US$250 million in Bitcoin as a treasury reserve asset. CEO Michael Saylor shifted the company’s strategy toward this express purpose, using its balance sheet and cash, along with capital raised through debt and preferred shares, to acquire Bitcoin.
These actions added leverage to the balance sheet in pursuit of that strategy. As a result, MSTR holds a significant Bitcoin position – 847, 363 Bitcoin as at July 2, 2026. Its total Bitcoin holdings are valued at more than US$52 billion as of that date. The company carries meaningful exposure to Bitcoin’s price.
While MSTR is not a direct investment in Bitcoin, its Bitcoin holdings and balance sheet leverage have led the market to treat it as a leveraged proxy for Bitcoin. It’s also subject to sentiment around its strategy more broadly, which can independently affect its share price.
2. What is MSTE?
MSTE is a Canadian-dollar-denominated ETF listed on the TSX that holds shares of MSTR. It employs a covered call strategy and uses approximately 25% leverage.
3. What’s the difference between MSTY and MSTE?
MSTY is a sister ETF, also priced in Canadian dollars and listed on the TSX, holding MSTR and writing covered calls. However, MSTY does so without leverage. This is for investors who want the strategy without the added risk.
4. Why are the funds down?
MSTR has declined alongside Bitcoin, and sentiment has turned negative toward both Bitcoin and Bitcoin treasury companies by extension. This has weighed on fund performance, amplified by MSTE’s 25% leverage and by the covered call strategy’s inherent cap on upside participation each month.
5. What has happened to the distributions?
Distribution amounts depend on prevailing market conditions. As net asset vale (“NAV”)has declined and option premiums have shrunk accordingly, the distribution has been reduced several times – most recently in June, from $0.15 to $0.10 per unit. Since inception, the fund has paid $6.02 per unit in total distributions.
6. How are distributions taxed, and what’s the strategy behind them?
Distributions may consist of capital gains, option premiums, and return of capital. A detailed annual breakdown is published each mid-February for the prior year; 2024 and 2025 breakdowns are available at the link below:
Premiums are generated monthly through covered call writing, typically on approximately 30-day options written slightly out of the money. The investment team assesses premium-generation capability at each monthly write, which forms the basis for that month’s distributions. While some smoothing occurs month to month, distributions are ultimately set based on what’s attainable through option premiums at the time. Given the NAV decline, this has led to meaningful month-over-month adjustments. Further changes are possible in either direction, depending on NAV and premium levels going forward.
7. Have the fund’s objectives, strategy, or operations changed? Is there a risk of closure?
The fund continues to operate in line with its stated objectives and strategy – approximately 25% leverage, with options written on roughly 33% (up to 50%) of the portfolio, despite the challenging environment.
A lower net asset value (NAV) may affect the achievable distribution amount, but the fund’s viability depends on total assets under management, not NAV per unit. A sustained AUM below $20 million would raise the fund’s relative cost structure; at approximately $300 million currently, this is not a near-term concern. Continued viability also depends on the fund’s ability to execute its strategy, including MSTR’s continued trading and options availability.
Full risk disclosure is available in the prospectus, which we would encourage investors to review.
https://harvestportfolios.com/wp-content/uploads/hhis/pdf/prospectus/en/hhis_prospectus_03.pdf
8. What is a reverse split, and will the fund do one?
A reverse split consolidates units and adjusts NAV and trading price proportionally. For example, an investor holding 100 units at $1 would hold 10 units at $10 after a 10-for-1 split. Unlike a stock split, this has no material impact on ETF investors, since it isn’t driven by supply and demand.
There’s no regulatory requirement for a reverse split. However, if NAV were to remain sustained below $1 for an extended period, a very low unit price can cause a one-cent bid-ask spread to represent a larger percentage cost for investors.
, Any material change of this kind requires investor notice at least 60 days before taking effect.
9. What ongoing information is available?
Formal regulatory documents and fund facts, available on our website, contain full details on the fund’s operations, risks, and strategy. Financial statements are reported semi-annually; June 30 financials will be available in August.
Additional resources – including monthly fund commentary, a summary of monthly option activity, and recent articles and videos addressing the current environment – are available on the fund’s landing page, or by subscribing to receive them directly.
10. Is MSTE growing or shrinking?
Interest in MSTE remains strong, with new unit creation increasingly meaningfully as NAV has declined. This reflects continued investor demand – not a driver of NAV per unit – and its current scale continues to support meaningful economies of scale and full execution of its strategy.
Disclaimer
This communication should not be considered as advice and/or a recommendation to purchase or sell the mentioned securities or used to engage in personal investment strategies. Tax, investment and all other decisions should be made with guidance from a qualified professional.
Commissions, management fees and expenses may be associated with investing in Harvest ETFs. Please read the relevant prospectus before investing. The Funds are not guaranteed, their values change frequently, and past performance may not be repeated. The Funds are categorized as liquid alternative ETFs. This means they have the ability to use leverage and can invest more than 10% of their assets in a single issuer. The Funds employ modest leverage using a combination of written puts and cash borrowing.
Certain statements included in this communication constitute forward-looking statements (“FLS”), including, but not limited to, those identified by the expressions “expect”, “intend”, “will” and similar expressions to the extent they relate to the Fund. The FLS are not historical facts but reflect Harvest’s, the Manager of the Fund, current expectations regarding future results or events. These FLS statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Although Harvest, the Manager of the Fund, believes that the assumptions inherent in the FLS are reasonable, FLS are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. Harvest, the Manager of the Fund, undertakes no obligation to update publicly or otherwise revise any FLS or information whether as a result of new information, future events or other such factors which affect this information, except as required by law.
