A 25.22% distribution rate met a -0.32% SEC yield as the 10-year paid 5.01%
REX FANG & Innovation Equity Premium Income ETF posted a 25.22% distribution rate as of September 15, 2026, against a -0.32% 30-day SEC yield and 100% estimated return of capital; the 10-year Treasury yielded 5.01%.
The Federal Reserve on Wednesday, September 16, raised its funds-rate target by a quarter point to 3.75%–4.00%, a unanimous vote and the first increase since 2023. You can collect 5.01% from the 10-year Treasury with no fund wrapper and no capital coming back labeled as a distribution. REX's technology covered-call fund is advertising a weekly check multiplied by 52.
How FEPI's 25.22% rate is built
REX FANG & Innovation Equity Premium Income FEPI holds 15 technology stocks and sells calls on them. The sponsor posts a 25.22% distribution rate as of September 15, the latest weekly check annualized against net asset value. The 30-day SEC yield, the standardized figure for net investment income, was -0.32% for the 30 days ended August 31. The sponsor's 19a-1 notice for the distribution paid September 3 estimated 100% of that cash as return of capital: cash that is not earnings and that reduces your cost basis.
The fund holds $710 million. JPMorgan Equity Premium Income JEPI, which sells calls against a large-cap book, holds $45.3 billion; its Nasdaq-100 counterpart JEPQ holds $43.0 billion. Funds that sell options to generate cash, grouped as derivative-income ETFs, took in $40 billion in 2026 through July.
The latest weekly FEPI check was $0.2044 a share, ex-dividend September 16. Over the past year the share price is down 8.9%. Count the distributions back in and the total return is 17.2%, within a tenth of a percentage point of State Street's S&P 500 fund SPY. Reinvest the checks and you kept up. Spend them, and you have a smaller pile of the same volatile stocks, with the upside capped by the calls you sold.
YieldMax made the same construction explicit in its September 16 Group 2 notice, annualizing one weekly payment against September 15 net asset value, with 30-day SEC yields through August 31. The Moderna option-income fund MRNY has a 90.69% distribution rate against a 1.01% SEC yield; the Strategy option-income fund MSTY has 85.44% against 1.74%. YieldMax's notice says the 30-day SEC yield "represents net investment income, which excludes option income," and that the distribution rate "represents a single distribution from the ETF and does not represent its total return." Last week's Income Monitor found the same gap in a different wrapper: A 62% larger HOOY check still left holders down 6.1%.
Global X Nasdaq 100 Covered Call QYLD goes ex-dividend Monday, September 21, at $0.1767 a share. The last 12 paid monthly checks, through August, equal 11.45% of the $18.55 price on Friday, September 18. The share price is up 9.0% over the past year; total return is 22.8%.
FEPI's share price fell as total return kept pace with SPY
- Share price
- Total return
- FEPI
- Share price −8.9%
- Total return +17%
- QYLD
- Share price +9.0%
- Total return +23%
- SPY
- Share price +16%
- Total return +17%
This week's cash against a 5.01% Treasury
Two days after the Fed moved, SPY went ex-dividend Friday, September 18, at $1.889 a share, payable October 30. Four quarterly checks, the cash already paid, equal 1% of Friday's $761.69 close. iShares Core S&P 500 IVV, iShares Core Dividend Growth DGRO, and iShares Select Dividend DVY all raised their September checks from June; trailing yields sit at 1.1%, 1.94%, and 3.38%. None of them clears the 10-year. iShares International Select Dividend IDV paid $0.530; four quarters equal 5.55% of Friday's price.
State Street SPDR Portfolio Europe SPEU goes ex-dividend Monday at $0.228 a share, 31% above last September. European companies cluster payouts in the second quarter, which is why June's check was $0.896.
iShares 0-3 Month Treasury Bond SGOV holds T-bills that mature inside three months. Its September check was $0.3071 a share, 14.7% smaller than a year earlier. Twelve months of those checks equal 3.69% of Friday's price, still below the 4.14% 3-month Treasury. The next payment, due around October 1, will start to catch Wednesday's hike.
iShares iBoxx $ Investment Grade Corporate Bond LQD paid $0.444 a share on September 4. Twelve months of checks equal 4.79% of Friday's price, 0.22 percentage points less than the 10-year. The fund returned -2.19% over the past year. iShares iBoxx $ High Yield Corporate Bond HYG paid $0.435; its trailing yield is 6.03%, and its 12-month total return is 2.79%. Spend the coupons and the share price is still 3.1% lower than a year ago.
The ICE BofA U.S. High Yield option-adjusted spread, the extra yield on junk bonds after adjusting for call features, closed September 17 at 2.70%, five basis points wider than September 11. The investment-grade spread was 0.78%, two basis points tighter.
Cash paid versus total return through Friday, September 18:
The 19a-1 notice before the next check
The next weekly checks will carry another distribution rate. The figure that tells you whether that cash came from earnings or from your own shares is already on the sponsor's site: the 19a-1 notice's return-of-capital line, set against the 30-day SEC yield. If the notice says return of capital, spending the check is a withdrawal.
Frequently asked
What is a distribution rate, and why is FEPI's so high?
It annualizes one weekly check against net asset value, so a single payment multiplied by 52 produces a 25.22% figure that is not a return.
Where is the cash coming from?
The sponsor's 19a-1 notice estimated 100% of the September distribution as return of capital, cash that is not earnings and that reduces your cost basis.
Did FEPI holders actually lose money?
Only if they spent the checks: the share price fell 8.9% over the past year, while total return with distributions reinvested was 17.2%, matching SPY.
Which funds actually pay more than the 10-year Treasury?
Among the funds tracked here, high-yield corporates and international dividends clear it; the S&P 500, dividend-growth, high-dividend, T-bill and investment-grade funds do not.