PFFA currently yields about 9.6–9.7%, paying roughly $0.17/month—about…
PFFA currently yields about 9.6–9.7%, paying roughly $0.17/month—about $2.04/year on a $21.30 share .
Over the next two years, assuming:
• You hold a round 100 shares (~$2,130)
• Monthly payout stays steady at $0.17
You’d receive:
• Year 1: 100 × $0.17 × 12 = $204 (~9.6%)
• Year 2: same again, totaling $408 over two years = ~19.2%
Note: Returns fluctuate slightly based on share price and slight dividend drifts (it hovered near $0.168–0.17/month recently) .
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📈 Covered-Call Option Strategy
Selling covered calls on ETFs like PFFA lets you earn premiums but caps upside gains.
Example framework:
1. Own 100 PFFA shares at $21.30
2. Sell one 1-month out‑of‑the‑money (OTM) call, strike $22.00, expiring ~1 month ahead.
• Let’s assume the premium is ~$0.30 (for estimation).
Monthly income:
• Option premium (sold): $0.30
Total monthly potential:
• Dividend $0.17 + Premium $0.30 = $0.47per share
Annualized:
• $0.47 × 12 = $5.64/year, or 26.5% on capital ($21.30) before considering share appreciation.
Cap and risk:
• If PFFA stays below $22 by expiration, you keep both dividend and premium, and repeat.
• If it rises above $22, your shares get called (sold) at $22.
• You’d pocket: $22 - $21.30 + $0.30 = $1.00 gain ≈ 4.7% profit + the dividends collected to that point.
• After assignment, you no longer hold the shares but keep all income.
Two-Year Projections:
Scenario A: No assignment (PFFA stays ≤ $22):
• Income/year: $5.64 × 100 shares = $564
• Two-year: $1,128 ≈ 53% total return, in addition to price changes.
Scenario B: Assigned in Year 1 (called at $22):
• Year 1: Premium + dividend + gain = ~$0.30 + 0.17 + 0.70 = $1.17 per share = 5.5%
• Year 2: You’d need to rebuy shares and restart covered calls—total may vary.
Even with cautious assumptions, covered calls can boost income from ~9.6% to ~25–30% annually—but be aware this gives up upside beyond strike.
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