The Hidden Price Of A High Yield
These funds deliver a steady income stream, but the total return they leave on the table is a cost every holder should see.
Some funds are built on a specific trade, offering a dividend yield of 2.5% or more in exchange for a total return that lands in the bottom 40% of the market. For an income-focused investor, that can sound like a fair deal, turning market growth into a more immediate cash payout.
That Trade Has A Steep Price.
Out of 131 US-focused equity ETFs, just 14 make this trade today. The Amplify CEF High Income ETF (YYY) is a clear example, paying a high yield while its total return has significantly lagged the broader market. The top five funds making this trade-off, ranked by their dividend yield, are below.
| Ticker | Fund | AUM | Div Yield | 3Y Return | Sharpe |
|---|---|---|---|---|---|
| YYY | Amplify CEF High Income ETF | $703M | 11.4% | +41% | 0.76 |
| RYLD | Global X Russell 2000 Covered Call ETF | $1.4B | 10.5% | +25% | 0.33 |
| QYLD | Global X Funds Global X NASDAQ-100 Covered Call ETF | $8.2B | 10.4% | +48% | 0.74 |
| XYLD | Global X S&P 500 Covered Call ETF | $3.2B | 9.5% | +38% | 0.70 |
| JEPI | JPMorgan Equity Premium Income ETF | $44.5B | 7.4% | +30% | 0.50 |
Of the 14 funds that qualify, the table shows the top five by dividend yield.
The S&P 500, for comparison, has returned +77% over the past three years.
YYY Delivers Income, But Lags The Market
The Amplify CEF High Income ETF (YYY) shows exactly what this trade looks like in practice. It delivers an 11.4% dividend yield, a very attractive income stream. But achieving that has meant accepting a 3-year total return of +41%, far behind the market’s performance. The fund’s 3-year alpha, which measures its performance against the S&P 500, is -5.7% a year.
RYLD Shows A Sharper Version Of The Trade
The Global X Russell 2000 Covered Call ETF (RYLD) offers a similar proposition with a different engine. It generates a 10.5% dividend yield using an options strategy. The cost has been a 3-year total return of +25%, and its 3-year alpha versus the S&P 500 is -11.5% a year. Its beta of 0.59 suggests it captures just over half of the market’s swings, which can cushion downturns but also mutes its participation in rallies.
Putting A Number On The Trade-Off
That high income feels like free money, but it is a choice with a clear cost. The JPMorgan Equity Premium Income ETF (JEPI), for instance, has a 3-year alpha of -3.4% a year. That is the portion of market return its holders did not capture, in exchange for the income it paid out. The purpose of this list is to make that price tag visible.
Put the 3-year total return of your income fund next to the market’s +77% gain. If the gap between your fund’s return and the market’s is bigger than the income you received, you can decide, with the number in front of you, whether the trade is still one you would choose.
What Other Screens Could You Run?
This is one screen among many, tuned to a single question. If what you care about is a different angle – momentum in a sector, income without the decay, skill without the leverage – the same underlying data answers those too, and it can score any fund you already hold on the exact measures above.
Our ETF Valuation and Performance Scorecard puts every one of these measures – alpha, beta, Sharpe ratio, valuation versus its own history, cost, and concentration – side by side for every major US equity ETF. Run this exact check on any fund you own; it takes seconds, and the result is often not what the fund’s marketing suggests.
The Fund Diversifies. Does The Rest Of Your Wealth?
A fund like this spreads risk by design – which makes it easy to forget the single stock sitting outside it that has quietly grown into a large share of your net worth. That one position is the real exposure, and selling it to diversify hands a slice of the gains to the IRS. There is a way to cap its downside and unwind it tax-efficiently.