Core Viewpoint - The Global X S&P 500 Covered Call ETF (XYLD) provides monthly income through a covered call strategy but incurs a hidden cost of approximately 5% annually in total return, which may affect long-term growth for investors seeking immediate cash flow [1]. Group 1: Income Generation - XYLD distributed $4.48 per share in 2025, with an average monthly distribution of $0.37, supported by $3.2 billion in net assets and a 0.60% expense ratio [1]. - The fund employs a covered call strategy by selling call options on the S&P 500 index, generating consistent income through premiums collected from buyers [1]. - The current VIX reading of 19.62 indicates normal conditions for premium generation, with historical fluctuations noted, including a spike to 52.33 during a market crisis [1]. Group 2: Distribution Sustainability - Distributions in 2025 ranged from $0.29 to $0.40 monthly, totaling $4.48 for the year, a decrease from $5.07 in 2024 due to the absence of a special year-end distribution [1]. - The fund's total return has lagged behind the S&P 500, gaining roughly half of what the index returned over the past year, highlighting the trade-off between income generation and capital appreciation [1]. - XYLD has maintained uninterrupted monthly distributions since 2013, indicating sustainability as long as the fund can continue selling call options [1]. Group 3: Investor Considerations - Investors in XYLD are trading long-term growth for current income, which results in an annual cost of approximately 5 percentage points in total return [1]. - The fund primarily attracts retirees and income-focused investors who prioritize monthly cash flow over capital appreciation, reflecting a broader trend in the market for covered call strategies [1].

Most covered call ETFs work similarly. And here’s where I think the disconnect is: When the underlying, QQQ in this case, goes up nicely, no one notices the mechanics. But what about when QQQ goes down, and not just for a month or two?In round numbers, over the past 12 months, QQQ has made 12%. QYLD has made about 6%, which is the yield minus the “principal drag” from forsaking most of the upside in order to spin off monthly cash flow, funded by option premiums.QQQ yields next to nothing, but QYLD yields mo ...

On Feb. 3, 2026, Bensler, LLC disclosed a new position in the Goldman Sachs Nasdaq-100 Premium Income ETF (NASDAQ:GPIQ), acquiring 222,468 shares in a transaction estimated at $11.7 million based on quarterly average pricing. What happened According to a Securities and Exchange Commission (SEC) filing dated Feb. 3, 2026, Bensler, LLC reported a new holding in Goldman Sachs Nasdaq-100 Premium Income ETF (GPIQ), acquiring 222,468 shares during the fourth quarter. The estimated transaction value was $11.7 m ...

Core Viewpoint - Generating passive income through investments, particularly in dividend stocks and ETFs, is a primary goal for many investors, including beginners and retirees [2][3]. Group 1: ETFs Overview - Exchange-traded funds (ETFs) are professionally managed funds that invest in a diversified portfolio of dividend-paying stocks, providing a steady stream of income [3]. - Many top ETFs offer monthly dividends, with yields reaching up to 8% [3]. Group 2: JEPQ ETF Details - The JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) offers a high yield of 11.42% by investing in low-volatility Nasdaq 100 stocks and selling call options [7][8]. - JEPQ has $32 billion in assets under management and has generated a 3-year return of 89.11% [8]. - The ETF has an expense ratio of 0.35% and has consistently increased dividends for three consecutive years, recently announcing a dividend of $0.465 per share [9]. Group 3: Investment Strategy and Risks - JEPQ employs a covered call strategy, which involves writing call options on its holdings to generate additional income [4]. - The ETF's portfolio is heavily concentrated in the technology sector (41%), with significant holdings in major companies like Nvidia, Apple, and Microsoft [10]. - While JEPQ provides high yields, it also presents risks such as variable monthly income and underperformance in bull markets due to capped upside potential [4].

Core Viewpoint - JPMorgan Equity Premium Income ETF (JEPI) offers an attractive yield of 8.21% through monthly distributions, but this comes with trade-offs that retirees should consider, particularly in terms of growth potential and income stability [1]. Investment Strategy - JEPI generates its yield by holding approximately 120 large-cap stocks and selling call options on these positions, which provides immediate income but limits upside potential during strong market rallies [1]. - The fund has a total asset size of $41.5 billion and includes high-quality stocks such as Johnson & Johnson, Alphabet, and Microsoft, which contribute to its stability [1]. Performance Comparison - Over the past year, JEPI returned 8.49%, significantly lagging behind the S&P 500's 13.47% gain, highlighting the inherent trade-off of the covered call strategy [1]. - In contrast, Schwab U.S. Dividend Equity ETF (SCHD) achieved a return of 17.49% by focusing on quality dividend payers without capping upside through options [1]. Income Variability - Monthly distributions from JEPI fluctuate based on market conditions, with recent payments ranging from $0.33 to $0.54 per share, creating challenges for retirees with fixed expenses [1]. - Although JEPI has never missed a payment since its inception in May 2020, the variability in distributions can complicate budgeting for essential expenses [1]. Portfolio Role - JEPI is best utilized as part of a diversified retirement income strategy rather than as a standalone investment, ideally paired with dividend growth funds to balance current income and long-term growth potential [1]. - The fund has a reasonable expense ratio of 0.35%, which is favorable for an actively managed strategy, and its size provides operational stability [1].

Core Viewpoint - Amplify ETFs has enhanced the Amplify Energy & Natural Resources Covered Call ETF (NDIV) by incorporating a covered call strategy to increase income-generating capabilities while maintaining its focus on energy and natural resources equities [1][5]. Group 1: Fund Overview - NDIV aims to achieve a total annualized income of 10% or greater through a combination of option premium income and dividends, while providing exposure to energy and natural resources equities [2][4]. - The fund will track the VettaFi Energy and Natural Resources Covered Call Index, which applies a covered call overlay to a portfolio of dividend-paying companies in the relevant sectors [2][4]. Group 2: Income Generation - The targeted income profile of NDIV is supported by two cash flow sources: covered call premiums and dividends, with potential for additional returns linked to the performance of the underlying equity holdings [3][5]. - The fund is designed to attract investors seeking a balance between capital appreciation and monthly income, with a target income level of 10% and no anticipated K-1 form [5]. Group 3: Market Dynamics - Energy and natural resource companies have experienced strong momentum due to rising global energy usage, driven by factors such as artificial intelligence, U.S. reshoring initiatives, global electrification, and ongoing infrastructure investment [4]. - These dynamics have positively impacted cash flows and earnings across the sector, reinforcing its relevance in both capital appreciation and income-oriented investment strategies [4]. Group 4: Company Background - Amplify ETFs, sponsored by Amplify Investments, manages over $20 billion in assets as of January 31, 2026, and offers a range of actively managed and index-based ETFs focused on growth, income, and risk-managed strategies [6].

Core Viewpoint - The article discusses high-yield exchange-traded funds (ETFs) that can provide substantial passive income while maintaining a focus on long-term growth, particularly in light of potential interest rate cuts later in the year [4]. Group 1: High-Yield ETFs - ProShares Russell 2000 High Income ETF (ITWO) targets high monthly income from small-cap U.S. stocks and aims for long-term total returns comparable to the Russell 2000 Index [5]. - ITWO has a yield of 11.37%, while iShares Treasury BuyWrite Strat ETF (TLTW) yields 14.71%, and Westwood Salient Enhanced Midstream Income ETF (MDST) yields 9.03% [8]. - ITWO employs a "daily reset" approach, which contrasts with traditional covered call ETFs that sell monthly options, potentially capturing more upside in bull markets [7]. Group 2: Market Position and Performance - Smaller-cap stocks have been underperforming, but recent interest rate cuts are revitalizing these stocks, leading to strong performance in the Russell 2000 Index over the past few months [6]. - MDST focuses on midstream energy pipelines that earn fee-based revenues from increased U.S. energy exports to Europe, positioning it well in the current market [8]. - A select group of ETFs has successfully generated substantial yields without excessive risk, indicating potential for meaningful passive income opportunities [4].

Combine the biggest ETF manager, one of the hottest trends in ETF investing, and a new product launch, and what do you get? Meh. There’s nothing bombastic or shameful about the planned iShares Bitcoin Premium Income ETF, due to debut soon. And it certainly has a solid firm behind it. Covered call ETFs, including active ones, are not new. And frankly, I find the product glut downright dangerous. More News from Barchart I’m not pointing fingers at any one firm. It is the sum total of option-driven income ...

Core Viewpoint - The YieldMax MSTR Option Income Strategy ETF offers a high distribution rate of 75.1%, but it comes with significant drawbacks that may deter even the most income-focused investors [2][3][11] Group 1: ETF Overview - The YieldMax MSTR Option Income Strategy ETF is an income-generating product linked to Strategy, the largest corporate owner of Bitcoin [2] - The ETF has $1.44 billion in assets under management, making it the fourth-largest single-stock ETF [3] Group 2: Income Generation Mechanism - This ETF operates as a covered call product, selling call options on shares of Strategy, which limits the upside potential for investors [5] - The ETF does not pay traditional dividends; instead, it provides distributions, with 94.7% of its most recent distribution being a return of capital (ROC) [7][8] Group 3: Tax Implications and NAV Concerns - Distributions from the ETF are taxed at higher rates (up to 37%) compared to qualified dividends (up to 20%), making traditional dividend stocks potentially more attractive from a tax perspective [9][10] - The return of capital leads to erosion of the ETF's net asset value (NAV) over time, which can cap upside potential and result in scenarios like reverse splits [11]

Group 1: Fund Overview - The XAI Madison Equity Premium Income Fund (NYSE: MCN) aims to provide a high level of current income and gains, with a secondary objective of capital appreciation [3] - The Fund invests primarily in high quality, large and mid-capitalization stocks that are considered reasonably priced relative to their long-term earnings growth rates [3] - The Fund employs a strategy of selling covered call options on its portfolio stocks to generate current earnings from option premiums [3] Group 2: Upcoming Webinar - The Fund will host its Quarterly Webinar on February 3, 2026, at 11:00 am (Eastern Time), moderated by Kimberly Flynn, President at XA Investments [1] - Portfolio Managers Ray Di Bernardo and Drew Justman from Madison Investments will participate in the Q&A style webinar [1] Group 3: Company Background - XA Investments LLC, founded in 2016, serves as the investment adviser for multiple closed-end funds and provides investment fund structuring and consulting services [4] - Madison Investments, established in 1974, manages approximately $29.3 billion in assets as of December 31, 2025, and has extensive experience in covered call strategies [6]