iShares 20+ Year Treasury Bond Buywrite Strategy ETF (TLTW) yields 13.92% through covered calls on long-term Treasury bonds.
TLTW holdings likely benefit from Fed rate cuts as long-term bonds increase in value.
A three-ETF strategy combining TLTW with gold and silver covered call funds targets 18.5% total yield.
A recent study identified one single habit that doubled Americans’ retirement savings and moved retirement from dream, to reality. Read more here.
If you want a $7.7k monthly income on a $500k portfolio, some may call you crazy, but it is still possible. ETFs like the iShares 20+ Year Treasury Bond Buywrite Strategy ETF (BATS:TLTW), FT Vest Gold Strategy Target Income ETF (BATS:IGLD), and the Ubs Ag Etracs Silver Shares Covered Call ETN Exp 21 Apr 2033 (NASDAQ:SLVO) give you very high yields and a respectable safety profile that can boost your yields massively if you put them in your portfolio.
The catch is that these ETFs alone should not constitute your entire portfolio. If you have a portfolio of, say, $1 million, and you want a little more income, you can set aside $500k to higher-yielding ETFs like these to boost your overall income while having some funds to fall back on just in case they don’t do as well.
If not, you should only chase more yield if you fall into any of the two following categories:
You are nearing the end of your retirement, and you want to end it lavishly.
You’re struggling to make ends meet, and you’re willing to sacrifice some safety for yield.
A $500k portfolio churning out $7.7k per month means $92.4k a year, or an 18.5% yield. The following 3 ETFs can make that happen. You can squeeze out even more yield if you allocate more money to the higher-yielding ones, but I’ll assume you’re just going to split your money equally among them for the sake of this article.
The FT Vest Gold Strategy Target Income ETF gives you exposure to the price movements of gold via the popular SPDR Gold Trust ETF (NYSEARCA:GLD) while also generating a consistent monthly income. Simply put, it tracks gold but adds extra income by writing call options on gold and then collecting premiums.
Your typical covered call ETF that targets the stock market also generates its income this way. The difference is that gold is much more likely to stay solid through a recession. One bad jobs report, or a major company like Nvidia (NASDAQ:NVDA) reporting a bad quarter, can send covered-call ETFs like JPMorgan Equity Premium Income ETF (NYSE:JEPI) down by double digits. They’re only flashy today due to the extended rally.
IGLD has a stronger foundation as gold itself looks incredibly strong right now, with central banks worldwide stockpiling gold. Sanctions on Russia have caused gold exports from the country to plunge. It’s a triple whammy that favors gold when you take the shaky global economy into account.
IGLD yields 7.39% with an expense ratio of 0.85%, or $85 per $10,000. It’s steep, but you won’t find a higher-yielding name if you want to buy something that targets GLD.
The iShares 20+ Year Treasury Bond Buywrite Strategy ETF executes a very similar strategy, this time with U.S. Treasury bonds. It holds shares of another ETF called the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT), which holds U.S. bonds expiring in 20+ years.
Then, it uses monthly covered call options on those holdings to boost income.
Again, this is much better than your run-of-the-mill covered call ETF in terms of safety. Bonds are not going to shift under your feet, because they’re the safest asset you can hold. Besides, you are likely to get upside on top of the generous yield as Fed interest rates come down. The Fed lowered its interest rates last week, and this is going to make long-term bonds more expensive as they already have secured a higher yield until they mature.
And even if a recession hits, I expect TLTW and TLT to go up, not down. TLT went from $95 to over $122 in a few months as interest rates were cut drastically in 2008. Today, TLT trades below $90 and snaps back quickly as Wall Street gets hungrier for yield. This will translate into more upside for TLTW, as it holds TLT.
The catch is that TLTW will underperform if the TLT remains flat, which is unlikely to stand the case as the Fed is cutting.
TLTW yields 13.92%. The expense ratio is 0.35%, or $35 per $10,000.
The Ubs Ag Etracs Silver Shares Covered Call ETN Exp 21 Apr 2033 tracks the performance of an index that mimics owning shares of a silver ETF. You benefit from rises in silver prices, but your upside is capped each month. It’s very similar to IGLD but more aggressive.
Do note that this is not an ETF. It is a debt note from UBS (credit risk involved), and it matures on April 21, 2033.
SLVO has long been a loser in the market, as it did not offer any capital appreciation until very recently. If you reinvested the dividends, it would still get you 2% to 3% a year.
However, what changed the equation is that silver prices have tripled since 2024. This is due to unceasing demand from multiple sectors like solar, AI, and more. Plus, silver is seen as a safe haven like gold. Many believe it can still deliver multibagger returns from here as silver’s valuation still pales in comparison to the historical gold/silver ratio.
SLVO is very under-the-radar and gets you a 34.73% yield. The expense ratio is 0.65%, or $65 per $10,000.
Most Americans drastically underestimate how much they need to retire and overestimate how prepared they are. But data shows that people with one habit have more than double the savings of those who don’t.
And no, it’s got nothing to do with increasing your income, savings, clipping coupons, or even cutting back on your lifestyle. It’s much more straightforward (and powerful) than any of that. Frankly, it’s shocking more people don’t adopt the habit given how easy it is.
Banks are hardly the fragile utilities they are claiming to be. www.marketwatch.com #Stablecoins #arent #threat #money #banking #industry Related reading:If…
