XYLD, RYLD Offer 10%-Plus Yields as Covered Calls Cap Bull-Market Gains
Updated
Updated · 24/7 Wall St. · Jun 26
XYLD, RYLD Offer 10%-Plus Yields as Covered Calls Cap Bull-Market Gains
3 articles · Updated · 24/7 Wall St. · Jun 26
Summary
XYLD yields 10.53% and RYLD 11.71% as of June 24, with monthly payouts driven by selling at-the-money calls on the S&P 500 and Russell 2000.
That income comes from giving up most upside above the strike price, turning potential capital appreciation into cash distributions and making both funds lag sharply in strong rallies.
Over the past decade, XYLD returned about 8% annualized with dividends reinvested versus roughly 15% for the S&P 500, underscoring the growth tradeoff retirees face.
RYLD adds higher small-cap volatility but richer option premiums, while both funds charge 0.60% and have variable distributions rather than bond-like fixed income.
Against peers, JEPI's 8.11% yield and DIVO's 4.55% yield preserve more upside; the report says XYLD and RYLD fit best as a limited income sleeve, ideally in tax-advantaged accounts.