UltraYield, Explained: Turning Blue-Chip Stocks Into Twice-Monthly Income
Evolve’s UltraYield ETFs are built on a simple recipe, and at a glance, every fund in the lineup shares a similar structure:
- A diversified portfolio of large, well-known companies.
- Active covered calls written on about half the portfolio to generate income.
- Modest leverage of up to 33% to boost income potential.¹
- Distributions paid twice per month.
The lineup is designed for investors who are:
- Seeking exposure to leading companies
- Comfortable with the added risk of leverage¹, which can amplify both gains and losses.
- Willing to accept capped upside from covered calls in exchange for higher income.
- Looking for cash distributions paid twice monthly
The combination of the return of the stocks in the portfolio, the leverage applied to them and how the call program is run ultimately drives the total return of the fund.¹ Here is how each piece works.
Step One: The Stocks
Income is only part of the story; the other part is what you own. Each UltraYield fund builds a portfolio of large leading companies in a specific geography or sector: BIGY (US), CANY (Canada), INTY (International), SIXY (Canada’s Big Six Banks), TECY (Nasdaq Technology companies). These portfolios share the traits that make a covered call program work:
- Large and established. Sizeable household names that have historically been an anchor to long-term equity portfolios.
- Diversified portfolio. Across sectors: BIGY, CANY and INTY are diversified across industries, so neither the returns nor the income depend on any one corner of the market. Within sectors: SIXY and TECY focus on a single area, Canada’s Big Six banks and Nasdaq technology companies, but hold the leading names within it.
- Highly liquid, with active options markets. Writing calls again and again requires deep, heavily traded options. The higher the volume in the options market on a stock, the better pricing the fund gets.
- Capable of generating meaningful premiums. Some stocks simply pay more for their options than others; generally, the more volatile a stock, the higher the premiums its options pay. The portfolios balance names whose options can generate higher option premiums, with steadier names that keep overall portfolio volatility in check.
The result is a portfolio you would recognise: leading blue-chip companies, held for the long run, with an income engine layered on top.
Step Two: An Active Income-Focused Call Program
The call program is where the enhanced income comes from, so it is worth a quick explanation. A covered call works like this:
- The fund makes a promise. If a stock it owns rises above a set price (the strike) by a set date, the fund will sell the stock at that price.
- It gets paid upfront. In exchange for that promise, the fund collects cash (the premium). Making the promise is called writing a call.
- The cash is kept no matter what. Whatever the stock does, the premium stays with the fund. The trade-off is giving up some of the upside if the stock price rises above the strike.
The program is managed actively, with decisions made every day rather than by a fixed formula. The key features:
- Calls on around half the portfolio. UltraYield targets call writing on roughly 50% of the portfolio. Writing on more of the portfolio generates more premium income, though the tradeoff is foregone upside on those covered names. The other half stays uncovered, so it keeps its full upside.
- Strikes chosen to fund the target distribution. A call with a strike right at the stock price (at-the-money, or ATM) pays the biggest premium; a strike set above the stock price (out-of-the-money, or OTM) pays less but leaves room for gains. All of Evolve’s covered call overlays are actively managed, but UltraYield funds target a higher level of income, so each strike is chosen to fund the distribution, and where it sits varies with the volatility of the underlying name. Because more volatile stocks pay higher option premiums, on higher-volatility names the fund can write significantly further OTM and still collect the premium it needs, leaving more room for the stock to rise. On quieter names, that may mean writing closer to ATM than Evolve’s other covered call funds, which typically set strikes 2% to 5% OTM, collecting a bigger premium in exchange for giving up more of the upside.
- Short-term options. Rather than writing one option a month, the UltraYield lineup can use shorter-dated options, generally one week. Writing shorter options means collecting premiums more often and getting frequent chances to reset strikes as markets move.
- Risk and reward, always balanced. Every decision weighs the income generated against the upside given away.
Step Three: The Leverage
The final ingredient is leverage, and it deserves a closer look.¹ Leverage simply means the fund takes on more market exposure than the dollars invested in it: with up to 33% leverage, each $100 in the fund can have up to about $133 of market exposure.¹ That extra exposure does two jobs: it increases the portfolio’s growth potential, and it gives the call program more stock to write options against, which means more premium income to support the distribution. Like everything else in the strategy, it comes with trade-offs worth understanding:
- It magnifies moves in both directions. With more market exposure than dollars in the fund, gains are larger when markets rise, and losses are deeper when markets fall.
- It has costs. Borrowed exposure comes with financing costs.
- It works together with the calls. Leverage lets the fund write calls on a larger amount of stock and collect more premiums.¹ At the same time, it means a larger share of the portfolio’s upside can be capped while the downside is magnified.
Put the calls and the leverage together, and you can see how the strategy works.¹ UltraYield funds use leverage to boost their income engine and generate larger, more frequent cash flow than a typical covered call approach.¹ That design comes with two tradeoffs. First, because the funds sell some of the upside to collect premiums, they may not fully participate in a strong rally. Second, because they use leverage, a falling market can hit harder, and the premiums collected cushion only part of that decline.¹ For investors who want high, regular income and are comfortable with the risks, UltraYield offers a focused way to put your portfolio to work.
Getting It All in One Ticket
Evolve’s UltraYield suite puts all these elements into single-ticket ETFs: BIGY for leading U.S. companies, CANY for Canadian equities, INTY for international exposure, and EASY for a single-ticket blend of those three geographies. SIXY offers a focused option for Canada’s Big Six banks, and TECY holds the Nasdaq technology companies. Each fund applies the active call program and modest leverage described above, and seeks to deliver enhanced, tax-efficient income with distributions paid twice per month.¹ Learn more at evolveetfs.com.
Disclaimers
Published September 30, 2026
¹ Leverage increases risk.
Evolve Funds Group Inc. is the investment fund manager and portfolio manager. All funds described herein are offered by Evolve Funds Group Inc. and distributed through authorized dealers.
The information contained herein is a general description and is not intended to be specific investment advice to any particular investor nor intended to be investment or tax advice. You should not act or rely on the information contained herein without seeking the advice of an appropriate professional advisor. The information contained herein is intended for informational purposes as a summary only, does not constitute an offer to sell any securities or a legally binding obligation, it is qualified entirely by, and should be read in conjunction with, the more detailed information appearing in the prospectuses found on the Evolve Funds Group Inc website at https://evolveetfs.com/
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