The majority of HPYT's holdings is in the US 20+ year treasury bond ETF (TLT). Roughly half of its yield in 2023 came from Return of Capital (RoC), which means that the ETF's unit value may take a hit as half of its distribution comes from the capital of the fund. Longer term allocation of course remains to be seen. Indicated yield is very high (15%+) and units are up 0.61% in three months. It writes covered calls on up to 100% of its securities. Bonds have been volatile, which has helped option premiums, but we would not expect them always to be. On the other hand, long term bonds have more sensitivity to rates, so a drop in rates would help the fund's securities' value. All in, it is too early to tell here. We would not expect 15% on an ongoing basis, certainly, and we would expect unit value to drop somewhat. Units are down about 60c since January. We would ballpark an ongoing yield in the 10% to 11% range. We have no issues with the strategy as long as investors understand the volatility of long bonds and the covered call strategy.
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