For some investors, traditional dividend stocks just don’t hurt the itching of their income. This has sparked a new interest in certain high yield exchange trade funds.
These funds boast high yields driven by covered call strategies targeting indexes or individual stocks.
Here are two such funds that are worth looking at right now.
The AldeMax TSLA Options Revenue Strategy ETF (TSLY) has been trading since November 2022. The fund pays monthly at a forward yield of 62.37%, or $4.83 per share.
Tsly has declined 43% since the start of the year, down 54% over the past 52 weeks.
The fund has an expense ratio of 0.99% or $99 on its first $10,000 investment, and oversees assets totaling around $1.09 billion.
Tsly’s strategy is built around a synthetic cover call approach. Instead of holding Tesla (TSLA) stocks directly, the fund creates a combined growth by purchasing call options and selling put options. Usually, there are strike prices that are close to Tesla’s market prices, ranging from six months to one year.
To generate revenue, Tsly sells short-term call options (usually expire within a month) at strike prices that are 0% to 15% above Tesla’s current price. This approach allows for participation in Tesla’s price movements, but if Tesla shares fall, the fund will rise to about 15% of its monthly profits, remaining fully exposed to negative side risk.
The portfolio is configured to support this option-based strategy with allocations that include bonds, cash, equities and short stock positions. Its top-holding combines Tesla option contracts with US Treasury banknotes of various maturities, and the structure of Tsly is completely different from traditional equity ETFs.
The Roundhill S&P 500 Target 20 Managed Distribution ETF (XPay) is part of the Roundhill Investments family and began trading on October 31, 2024. The XPay definition feature is monthly distribution and forward payments of $0.953 and $11.43 per share on June 11, 2025. This translates to a positive yield just over 21%.
As of July 2, 2025, XPay recorded an annual decline of 4%. The total assets under management are approximately $5.1 million.
XPay is actively managed and tracks the performance of your S&P 500 index ($SPX), but with a unique twist. Instead of holding the index directly, the fund invests at least 80% of its net worth deeply in the SPDR S&P 500 ETF Trust (SPY) in Money Flex Options, providing synthetic exposure to S&P 500 returns. This approach allows XPay to maintain its participation in the stock market while managing its cash flow to support its ambitious monthly distribution targets.
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