What XYLD, SPYI, and QYLD Actually Pay Per Share, and What That Income Costs You in Principal

Owners of three popular option income funds collected a check every month for the past year. Over the trailing 12 months ending in September, the Global X S&P 500 Covered Call ETF (NYSEARCA:XYLD) paid $4.3234 per share. The NEOS S&P 500 High Income ETF (CBOE:SPYI) paid $6.340326 per share, and the Global X Nasdaq 100 Covered Call ETF (NASDAQ:QYLD) paid $2.1309 per share. Those checks are real. What the share underlying each check has been doing matters more.

Per-share amounts can’t be compared head to head because the funds trade at very different prices: almost $42 for XYLD, about $54 for SPYI and about $19 for QYLD. None of these payments is fixed. Each distribution comes largely from option premium, the cash a buyer pays for the right to purchase an asset at a set price. Premium grows when markets are volatile and shrinks when they calm, so past checks guarantee nothing about the next one.

XYLD Hands Over Nearly Every S&P 500 Rally

XYLD owns the S&P 500 and writes covered calls against it monthly. A covered call means selling someone the right to buy your holdings at a set price (the strike) while you own them. XYLD sells at-the-money calls, struck near the index’s current level, which collects the fattest premium available but gives away almost all of the month’s upside.

The check moves around. Recent monthly payments ranged from $0.2964 in September to $0.4088 in July. In early 2022, when volatility ran hot, payments sat between $0.4808 and $0.5014. The record also shows an oversized year-end payout of $1.189548 per share in December 2024, proof that one month can reshape a yearly total.

XYLD’s adjusted share price rose 19% over the past year and 127% over ten years. “Adjusted” matters: the series folds past distributions back into the price history, so those gains describe an investor who reinvested every check.

SPYI Preserves More Upside and Leans on Tax Treatment

SPYI also holds S&P 500 stocks, but its option approach differs. NEOS sells calls on the S&P 500 index itself using a rules-based process, generally striking them above the market and adjusting how much of the portfolio is covered. That leaves some upside XYLD surrenders. Those index options are Section 1256 contracts, which receive a blend of long-term and short-term capital gains treatment regardless of holding period, the core of SPYI’s tax pitch.

The fund held about $10.4 billion in net assets at midyear, with megacap tech at the top; its largest position was roughly 7% of assets.

Its payout has been the steadiest of the three. The latest was $0.5338, against $0.5423 the month before, while late 2022 payments ran $0.4647 to $0.4853. Adjusted price performance since late August 2022, the earliest available date, came to 79%, with 17% over the past year. The record is short, covering roughly four years.

QYLD Sells Upside on Wall Street’s Most Volatile Big Index

QYLD applies XYLD’s at-the-money template to the Nasdaq-100. Its April filing shows a short index call. That call was written against a tech-heavy portfolio of about $8.3 billion whose largest holding was near 9% of assets. The Nasdaq-100 swings harder than the S&P 500, which means a fatter premium and more upside given away when tech rallies.

Monthly payments recently held in a tight band of $0.16 to $0.19 per share, most recently $0.1767. In early 2018, checks ran $0.2487 to $0.2502. Because at-the-money premium scales with the value being covered, a smaller check from the same strategy points to calmer markets, less value behind each share, or both.

Adjusted performance was 24% over one year, 51% over five and 160% over ten, ahead of XYLD across the decade.

Where Principal Goes While the Checks Keep Arriving

When an index drops sharply, a covered call fund takes nearly the full decline, buffered only by the premium collected, and when the index rebounds, an at-the-money call hands most of that gain to the option buyer. After a drawdown, the fund only partially recovers. So its net asset value (NAV) can finish a cycle lower even though no monthly payment was missed.

The adjusted figures above look healthy because they assume reinvestment. An investor who spent every distribution kept the checks plus whatever the raw share price did, and that raw path sits below the adjusted one. XYLD shows the pattern. Its monthly check fell from about $0.50 in early 2022 to $0.2964 most recently. Spending the payout while assuming principal stays whole is precisely the assumption this structure fails to guarantee, while SPYI’s lower coverage aims to keep more upside and its rising per-share payout fits that design over its brief history.

Costs Buried Below the Payout Line

XYLD’s net expense ratio is 0.60%, per the Global X summary prospectus. Current expense ratios for SPYI and QYLD are 0.68% and 0.60%, respectively.

Tax character is the other hidden cost. A meaningful share of these funds’ distributions has historically been labeled return of capital (ROC), meaning part of your own investment is being handed back. ROC generally escapes tax when received and brings down your cost basis instead, the purchase price used to figure gain or loss when you sell. That postpones tax, but an ROC dollar is a return of the principal you invested. Each fund sets its classification annually. It can change, and the breakdown arrives in Section 19 notices and on Form 1099-DIV.

Who Belongs in These Funds and Who Does Not

These three funds suit income investors who need monthly cash, accept a variable check, and willingly trade much of a strong rally for it. SPYI fits taxable accounts seeking more upside participation, while QYLD offers the most aggressive premium collection with the biggest swings. Investors who want principal to compound, or who plan to spend every check expecting the share price to hold, belong elsewhere.

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