A 20% Annual Yield That May Cost Too Much: The XPAY Case

The Roundhill S&P 500 Target 20 Managed Distribution ETF (XPAY) targets a 20% annual distribution via a synthetic, option-based structure. XPAY's high yield is funded by selling deep in-the-money SPY FLEX options, causing NAV erosion unless the S&P 500 returns at least 20% annually. It becomes in my opinion a tax-efficient solution to distribute capital in strong markets.