(Reuters) -REX Financial launched a single-stock exchange-traded fund tied to Nvidia ( NVDA ), the powerhouse chipmaker that has dominated stock market returns over the last two years, on Wednesday morning, hours ahead of the release of Nvidia's ( NVDA ) earnings.

The new fund, the REX NVDA Growth & Income ETF is a form of covered call ETF that uses option strategies to generate income while at the same time giving investors exposure to a portion of the upside in Nvidia's ( NVDA ) stock price, REX said.

"We think it will allow people to have their cake and eat it, too," said Scott Acheychek, REX's chief operating officer.

"They can stick with the stock that they follow and know and like, but with a risk profile that they're comfortable with and some weekly income" from the sale of options on Nvidia ( NVDA ), he said.

These single-stock option-based ETFs made their debut in late 2023, and now have about $10 billion in total assets. Overall interest in single-stock ETFs, a broader category that includes 1.5x or 2x leveraged products, continues to grow, said Bryan Armour, ETF analyst at Morningstar.

"They're all aimed at self-directed individual investors," Armour said.

While an ETF with this kind of structure likely would outperform the underlying stock if that stock is flat to lower, Armour said it makes more sense for investors either to buy individual stocks outright or to turn to options-based ETF strategies that are tied to broader portfolios.

"A product like this is not trying to maximize either growth or income."

Acheychek said this new approach to covered call single-stock ETFs is aimed at investors who increasingly are looking for alternative income-generating products.

Nvidia ( NVDA ) shares closed at $134.81 a share, down 0.5%, in exchange trading on Wednesday, ahead of the AI chipmaker's earnings announcement.