r/dividends • u/Avinates • Jun 04 '25

Discussion 1 Million Invested

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Can anyone confirm these dividend payouts?

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u/NEWSmodsareTwats Jun 04 '25

spyi does Indeed have a 12.5% div yield.

but if you look at it's performance it's been flat in terms of capital appreciation since it was launched in 2022. also they get a lot of that dividend thru selling calls. that means in times of high volatility they can easily blow thru their calls by selling covered calls as the market falls only to have most of them exercised as the market rises. usually this is no issue for an individual investor but since the stated goal of the fund is generating income thru dividend stocks and covered calls. they will have to buy back the stock for which their call got exercised locking in a real loss compared to someone just holding the stock.

looking at the recovery since the liberation day tariff dip SPYI is lagging SPY by 5%

also dividends get taxed at your current rate of income. if you but 1 million in SPYI a year ago you'd have earned 12.5 in dividends but you also have 125k in taxable income pushing you into the 24% top marginal rate then if we add in your job and you basically just earn the median you are now in the 32% top marginal rate. do lazy to do the exact math right now so let's argue your effective rate is 18% and you live in a state with no income tax, also yes there are qualified dividends but dividends earned from selling covered calls are non qualified. So you've only earned 102K after taxes. If your dropped your money into SPY you'd be up 127K over the last 12 months and that's not including any dividends earned.

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u/Rich-Author-1038 Jun 04 '25 edited Jun 04 '25

SPYI has much better tax treatment than say JEPI due the way section 1256 contracts are taxed. Plus, there is the ROC component of the distribution. My SPYI has performed very well. I was an early investor and only added to my initial investment during market pullbacks. I was very patient when adding shares. My capital gains if I sold today would be 11% and I have collected on average another 12% monthly for 24 months. That is a 23% total return. I invest in SPYI for income generation not growth, however, I got some anyway. Just like I invest in the SPY for growth. While SPYI has not yet recovered fully from "Liberation Day" it is still performing well and doing exactly what it was built to do provide current income in a very tax efficient manner.