SPYT writes S&P 500 index calls to target 20% annual distributions, while BIGY harvests single-stock call premiums from mega-caps like NVIDIA for a ~12% yield. QDPL skips options entirely, using dividend futures to deliver roughly quadruple the S&P 500's dividend yield while keeping full upside participation when markets rally. It sounds nuts, but SoFi1 is giving new Active Invest users up to $3,000 in stock for a limited time, and all it takes is a $50 deposit to get started.2 See for yourself (Sponsor) A new crop of exchange-traded funds markets monthly checks totaling 12% to 20% a year on large-cap equity portfolios.
Three newer names in the category, the Defiance S&P 500 Target 20 Income ETF (NYSEARCA:SPYT), the Defiance Large Cap Target Income ETF (NYSEARCA:BIGY), and the Pacer Metaurus US Large Cap Dividend Multiplier 400 ETF (NYSEARCA:QDPL), all aim at that range using different machinery. The label "target income" matters. These funds target a distribution level rather than a fixed yield.
They rely on a mix of underlying equity exposure, options premiums, dividend futures, and return of capital to build distributions. Each fund reaches a similar headline yield through a different route, and those routes decide what the investor actually owns. Most of these products layer a covered call program on top of an S&P 500 or large-cap equity portfolio.
The fund holds the stocks (or an ETF that holds them), then sells call options against that exposure, sometimes with zero-day-to-expiration contracts, sometimes weekly, sometimes monthly. Premium income from those calls funds the distribution. In exchange, the fund caps how much upside it captures when the market rallies past the strike price.
A different route is taken by QDPL. The fund uses S&P 500 dividend futures to lever up exposure to the index's dividend stream while holding the underlying stocks and short-duration Treasuries. The multiplier design targets roughly four times the S&P 500's ordinary dividend yield rather than harvesting option premium.
SoFi Active Invest is offering a limited-time promotion. Open an account, fund it with $50 or more, and you could receive up to $3,000 in complimentary stock for Active Invest accounts. See for yourself by clicking here now.
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