The Six Funds, in Plain English
This piece walks through a hypothetical income portfolio with five equal slots and six candidate funds. Two of the funds compete for the same slot, and that choice is the whole story. Here's what each fund holds:
- SCHD (Schwab U.S. Dividend Equity ETF): about 100 U.S. dividend-paying stocks, screened for dividend record and quality. Pays quarterly.
- SPYI (NEOS S&P 500 High Income ETF): holds S&P 500 stocks and sells call options on the S&P 500 index to generate monthly income.
- GPIQ (Goldman Sachs Nasdaq-100 Premium Income ETF): holds Nasdaq-100 stocks and sells calls on only part of the portfolio, which leaves more room for upside. Pays monthly.
- PFFA (Virtus InfraCap U.S. Preferred Stock ETF): an actively managed fund of preferred stocks that uses leverage (borrowed money, typically 20–30% of the portfolio, per Virtus) to boost income. Pays monthly.
- JAAA (Janus Henderson AAA CLO ETF): holds the top-rated AAA slices of collateralized loan obligations. Its income floats, rising and falling with short-term interest rates. Pays monthly.
- SGOV (iShares 0-3 Month Treasury Bond ETF): U.S. Treasury bills, which is essentially cash. Pays monthly.
The backdrop: large tech stocks have driven much of the recent stock market, and short-term interest rates have come down from their peak. Lower rates have already reduced the income paid by cash and floating-rate funds.
The Headline Numbers: 7.8% or 6.7%
Each fund gets one job and a 20% weight. SCHD's job is income with a history of growth. SPYI provides high current income. GPIQ provides income that keeps some upside. Slot four provides income that doesn't come from stocks, using either PFFA or JAAA. SGOV is the cash floor.
With PFFA in slot four, the blended trailing-12-month distribution yield is 7.8%, or about $77,700 a year on $1,000,000. With JAAA it is 6.7%, or about $66,900. The choice is worth about $10,800 a year in income.
Performance and yield figures are historical and may change. Total return includes price movement and distributions where available. Past performance does not guarantee future results. Yield is not the same as total return.
To make the tradeoffs easier to see, the examples below use a hypothetical portfolio. These are not suggested allocations. They are simplified illustrations of how different mixes could change income profile, growth exposure, and concentration risk.
Where the Income Comes From: Hypothetical $1,000,000, 20% per Fund
| Slot / Job | Fund | Trailing 12-Mo Yield (as of 9/24/2026) | Expense Ratio | AUM | Hypothetical PFFA-tilted example (Build A) | Hypothetical JAAA-tilted example (Build B) |
| 1. Income that grows | SCHD | 3.18% | 0.06% | $110.5B | $6,360 | $6,360 |
| 2. High current income | SPYI | 11.87% | 0.68% | $12.3B | $23,740 | $23,740 |
| 3. Income with some upside | GPIQ | 9.85% | 0.29% | $6.0B | $19,700 | $19,700 |
| 4a. Non-stock income | PFFA | 10.28% | 2.11% | $2.4B | $20,560 | — |
| 4b. Non-stock income | JAAA | 4.88% | 0.20% | $31.4B | — | $9,760 |
| 5. Cash floor | SGOV | 3.69% | 0.09% | $111.3B | $7,380 | $7,380 |
| Total | ~$77,700 (7.8%) | ~$66,900 (6.7%) |
Trailing yield here means distributions paid over the past year divided by the current price. We use the same method for every fund. Expense ratios and yields can change.
Costs differ too. The simple average expense ratio is about 0.65% for Build A and about 0.26% for Build B. PFFA's 2.11% total expense ratio (a 0.80% management fee plus other fund expenses, per Virtus) is the highest of any fund in either build. Part of that figure is interest on the fund's borrowing, so it isn't directly comparable to the other funds' fees. The yields above are already net of expenses, so it shouldn't be subtracted a second time.
SCHD Is Not There for Yield
SCHD is the lowest-yielding stock fund in the build. It yields 3.18%, compared with SPYI's 11.87% and GPIQ's 9.85%. It's included in the build for two other characteristics: its dividend has a history of growth, and its holdings look nothing like the other two stock funds.
