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S&P 500 dividend yield hits record lows, spotlighting covered-call ETF

An S&P 500-linked ETF strategy is gaining attention as the index’s dividend yield falls to 1.03% on the largest plain vanilla fund.

Reported · Written up by our desk · ETFs

ETF Trends highlights that the dividend yield on the largest plain vanilla S&P 500 ETF is about 1.03%, a level tied to the domestic equity benchmark reaching record-low dividend yield conditions recently.

The outlet says the shrinking yield reflects the S&P 500’s rise, but it can leave income-focused investors looking for alternatives amid renewed emphasis on less rate-sensitive income streams as bond market volatility increases.

ETF Trends points to the NEOS Boosted S&P 500 High Income ETF, ticker XSPI, which debuted in February and uses an options-based approach to generate income.

According to NEOS, XSPI is designed to create approximately 150% of notional portfolio exposure to its reference fund, NEOS S&P 500 High Income ETF (SPYI), by pairing exposure to SPYI with additional long exposure to the S&P 500 and a SPX covered call strategy.

Latest closeS&P 500 7,773.95 ▲0.7%

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