XDTE: Generates Large Dividend Yields, Pays Weekly, But It Doesn't Deal Well With Volatility

Summary

• XDTE offers attractive weekly income via a synthetic covered call strategy, but its reliance on daily options severely limits upside potential.
• The fund's 2025 performance was disappointing, with a -0.69% total return as distributions failed to offset share price declines.
• XDTE underperformed both the S&P 500 and alternative income ETFs like SPYI, which provided better total returns and capital recovery.
• While XDTE may suit some income-focused investors, I prefer to stay on the sidelines and allocate capital to more resilient income funds like SPYI.

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The idea of generating weekly distribution income without having to maintain an option strategy on my own was very interesting, as most income-producing ETF's pay their income on a monthly or quarterly basis. Roundhill created an income-focused ETF that did just that

Analyst’s Disclosure:I/we have a beneficial long position in the shares of SPYI 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. The investments and strategies discussed within this article are solely my personal opinions and commentary on the subject. This article has been written for research and educational purposes only. Anything written in this article does not take into account the reader’s particular investment objectives, financial situation, needs, or personal circumstances and is not intended to be specific to you. Investors should conduct their own research before investing to see if the companies discussed in this article fit into their portfolio parameters. Just because something may be an enticing investment for myself or someone else, it may not be the correct investment for you.