YYY ETF

Amplify High Income ETF (YYY) has a high-yield portfolio of 60 closed-end funds. YYY may be used in short-term trades to profit by some market anomalies. YYY has been showing a significant decay in value and distribution in the long term.

Amplify High Income ETF (YYY) is designed to capture high yields in the closed-end funds space in a conservative manner. The ETF focuses on high yields, larger discounts to NAV, and greater liquidity in its portfolio composition. YYY has had some reasonable performance over the last 12 months, but its longer-term numbers indicate structural weaknesses and a weak outlook for bond CEFs.

Amplify High Income ETF has maintained a consistent portfolio allocation with a focus on high-yielding closed-end funds. YYY delivered strong returns in 2023 but still under-earns its distribution yield, raising concerns about the sustainability of its payouts. Investors may want to consider the Saba Closed-End Fund ETF as an alternative, with higher historical returns and a more sustainable distribution policy.

Amplify High Income ETF warrants a sell rating due to declining share price, high expense ratio, and negative dividend growth rate. YYY consists of 79% bonds and 21% stocks, with holdings in U.S.-based closed-end funds. An alternative fixed-income fund, JPMorgan Equity Premium Income ETF, is preferred over YYY due to more favorable characteristics.

Amplify High Income ETF is structured as an exchange-traded fund and serves as a "fund of funds" in the closed-end fund space. YYY aims to replicate the ISE High Income Index, which selects CEFs ranked highest overall by ISE via the following factors: yield, discount to net asset value and liquidity. The article argues why a rules-based methodology, like the one used by YYY, might not be suitable for the CEF space, with the fund's historic performance confirming this view.

Amplify High Income ETF has underperformed the S&P 500 index, with a -33% price decrease and -11% total return since February 2021. The YYY ETF is a fund of closed-end funds with a high expense ratio of 2.72% and a portfolio heavily weighted towards bonds. A rotational strategy in CEFs may be a better option for preserving capital and income stream against erosion and inflation compared to YYY.

Amplify High Income ETF holds a basket of high-income closed-end funds. These include PDI, OXLC, USA, PTY, PAXS, and JPS. This does appear like income on steroids with extreme levels of diversification.

YYY invests in high-yield, highly discounted liquid CEFs but has a history of investing in underperforming CEFs, leading to consistent capital losses and dividend cuts. Despite its strong 12.2% dividend yield and diversified portfolio, YYY's strategy has proven ineffective, with the fund's share price down 41% since inception and dividends declining by 50%. A look at the fund, and its many pitfalls, follows.