Entering text into the input field will update the search result below

RYLD: The Math Behind This 13% Yielding Fund And Why I Own It

Steven Fiorillo profile picture
Steven Fiorillo


  • RYLD has established a proven track record of paying large monthly distributions since its inception in April of 2019.
  • RYLD's distribution is still one of the only investments that's outpacing inflation from an income generation perspective.
  • RYLD has mitigated the market decline better than the respective indexes while throwing off large amounts of distributable income.
  • I break down what an initial 100 share investment would look like since inception if you were to take the distributions as income or reinvest them along the way.
  • I do much more than just articles at Barbell Capital: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

Stock photo of an ascending staircase of coins on a blue background with a jar full of coins. Saving concept

Adrian Vidal/iStock via Getty Images

The Global X Covered Call funds have been controversial, to say the least. Some disagree with the methodology; some can't wrap their brains around capping your upside potential and sacrificing future growth for immediate income, while others are still

Barbell Capital provides investors with a comprehensive approach that utilizes growth, value, dividends, and options for income, to generate alpha in your portfolio while mitigating downside risk. Within Barbell Capital you will find exclusive research, model portfolios, investment tools, Q&A sessions, watchlists, and additional features for its members. There is also a live portfolio dedicated to generating capital from trading, selling puts, and selling covered calls. The profits will be allocated to future capital appreciating investments and investing in dividend investments to generate income while we sleep. Join today with a two week free trial!

This article was written by

Steven Fiorillo profile picture
I am focused on growth and dividend income. My personal strategy revolves around setting myself up for an easy retirement by creating a portfolio which focuses on compounding dividend income and growth. Dividends are an intricate part of my strategy as I have structured my portfolio to have monthly dividend income which grows through dividend reinvestment and yearly increases. Feel free to reach out to me on Seeking Alpha or https://dividendincomestreams.substack.com/

Analyst’s Disclosure: I/we have a beneficial long position in the shares of RYLD, QYLD, XYLD, VOO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: I am not an investment advisor or professional. This article is my own personal opinion and is not meant to be a recommendation of the purchase or sale of stock. Investors should conduct their own research before investing to see if the companies discussed in this article fit into their portfolio parameters.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (97)

T. Woody Wood profile picture
where are the dividends for April 2023? Not showing declared or paid on my Schwab chart.
ManWithoutName profile picture
Russell 2000 Covered Call ETF/Global X Funds (BATS:RYLD) on 05/20/2022 declared a dividend of $ 0.2113 per share payable on June 01, 2022 to shareholders of record as of May 24, 2022.
Source: https://bit.ly/3Ntwsad
Guess that QQQX is not worth the time?
okeeffej profile picture
@labman106 It wouldn't be a pick of mine, but I hope you the best.
investor48 profile picture
Steven- what is the usual composition of the distributions? Long or short term capital gains? ROC? qualified or non qualified distributions?
Looking to do an analyses of the tax implications. Thanks
The returns you have worked out would look quite different based on tax treatments in different jurisdictions. For instance, a tax could be payable on dividends and not on capital gains, together with no tax benefits on capital losses. Is there any reason you did not consider tax on the monthly payouts or were these post-tax payouts?
@Vishu.Ramachandran RYLD is best utilized in a tax deferred account.
salyer1105 profile picture
Like QYLD more at the moment due yo the dip. Also like QQQX. Will continue to dca into all 3.
Manzanita Research profile picture
Decided to take the plunge today with $RYLD under 20.50. I certainly don't claim to have caught the bottom but even if the volatility goes down and the yield cuts in half this could be a good hold considering yield on cost at these prices through a choppy market. The gamble is that it comes back to par on a price level so as not to become a yield trap within the next year or two.
with RYLD now below $21, Yahoo! Finance today showing "0.14%" yield is pretty disconcerting. I wonder how that would be a typo??
okeeffej profile picture
Thank you. I agree 100% and own everything you mentioned.
Good article.

I got some Ryld and Xyld but have stayed out of Qyld because the Nasdaq is taking it in the shorts with these interest rates. I am down a little money but so is everything else.
okeeffej profile picture
@sky4it2012 I look at QYLD as a time to buy. Tech isn't going away.
Steve and Koko's Dividend Stocks profile picture
@Steve V Dividend Investor update as we moved into more $QYLD and $XYLD over $RYLD but still love all three funds.
Accepting that different investors can have different objectives (e.g., long-term growth v. short-term income), mine are some combination of the two since that's the way to provide coverage of living expenses and insure we don't out-live our resources.

Who wouldn't like the high-frequency payouts from a covered call fund? But, first, many writers on SA have shown recently that call writing usually does little to mitigate the downside on a market decline. Secondly, after such a decline, the option writing limits the ability of the fund to rebound in price. So, we end up with most of the downside and very little of the upside.

That said, I'm not arguing against funds that write covered calls. I am suggesting, though, that such funds should be combined in a portfolio constructed in such a way as to attempt to capture all the upside in a market rally as well as all the income provided by covered call funds such a RYLD.
The math is simple. This is a terrible investment. Who comes up with these ETFs? It amazes me. It underperformed the underlying IWM with the same drawdown and volatility. If you want a low vol small cap portfolio hold 65% IWM and 35% cash. rebalance quarterly. You end up in the same spot with less risk. See below:

@MultiFamilyInvestor "Fund plus cash" means that to generate monthly income you'll need to liquidate shares every month, and not always at a profit. Plus you're reducing your capital base. Income investors are who use covered call funds. If you want growth, invest in a growth fund.
i am amazed at the regard for covered call writing, negative convexity is always at the scene of disasters, ( look it up if you don't know, Harley Bassman can help you) make a few pennies of option premium, at large loss risk. smart investors limit losses while preserving large gains. You are on the wrong side of the trade. Buy the calls with a few pennies so you get the gains, owning the call limits your losses, use the balance of your money to get dividends from the credit markets, way safer.
@bagerken it is only way safer when you know what you are doing when writing options or buying them.
The only thing worse than this article, is an investment in ryld. Terrible advice, awful investment. Using ryld’s strategy on vtwo or iwm, you could collect premium at ~40%/yr, or almost 4x times ryld’s payout. Why not do some basic math, and put that in your article?
haoleboy1967 profile picture
@mmouse527 sooty but I am trying to lean about this type of investments - could you clarify ? What is the better option
@haoleboy1967 ryld buys vtwo then sells at the money covered calls one month out. If you did this on your own, you would collect about 4x that ryld pays
@mmouse527 break it down then like the article did. I would like to see how a 1% yield beats a 11% yield.
roland999 profile picture
i really appreciate your articles on the series of ETFs. I bought 1200 shares of QYLD at different prices as the share price dropped and I am extremely happy with the monthly income. I have put in limit order for RYLD and plan to accumulate about the same amount of that ETF. The thing that I have noticed is many dividend paying stocks lowered or eliminated their dividends over the past few years but the ETFs you have covered only fluctuated and income has remained pretty stable. I believe I will soon sell AT&T and reinvest in RYLD---increase in income is a no brainer--thanks for your informative articles.
When I saw the headline, I hoped for an article detailing the math of how covered calls work.
@redav That has been done dozens, if not more, times in SA articles.
Nice article. RYLD is solid and grows with time ! Great combination . I have owned it for a year now .... all is good .
Steven Fiorillo profile picture
@JAVAR Thanks for reading and commenting
Burghman profile picture
If you like RYLD and I do, you might also like XRMI, another Global X fund. It holds the stocks in the S&P 500 and sells at the money calls on them but also buys 5% out of the money puts on those stocks for additional downside protection. It is a new fund but using dividend data for the first four months of this year it has paid about 11% on an annual basis. It is down about 9.1 % for the year.
Steven Fiorillo profile picture
@Burghman It sounds like NUSI. I will check it out thanks
@Steven Fiorillo I have been pondering XRMI as well. Would love to hear your take on that one Steve. Great article. Thanks
themerck profile picture
I am very pleased with the LD'S from global x and have been holding RYLD since inception . have any of you heard about this volatility etf SVOL? It has a 19% yield currently picked up some shares yesterday
@themerck May I ask what prompted you to buy it? Not much coverage and relatively new. But I am curious!
Steven Fiorillo profile picture
@themerck Thanks for reading and commenting
themerck profile picture
@Favorite Averitt I was interesting in their strategy of shorting volatility along with the deep OTM call for protection while only using 25% of their portfolio. And it was another way to diversify my income stream with a different strategy. Plus the fund has a huge yield so far even thought it did not start paying dividend until october 2021
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

About RYLD

SymbolLast Price% Chg
Expense Ratio
Div Frequency
Div Rate (TTM)
Yield (TTM)
Assets (AUM)
Compare to Peers

More on RYLD

Related Stocks

SymbolLast Price% Chg
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.