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A 45% annual yield sounds like the kind of promise you’d hear from a DeFi protocol right before a rug pull. But this one comes from a regulated ETF trading on a major US exchange, and it’s built on one of the hottest sectors in traditional finance: semiconductors.
The YieldMax Semiconductor Portfolio Option Income ETF, trading under the ticker CHPY, launched in April 2025 and has been turning heads with a distribution rate of 45.16%. The fund generates that income by selling call spreads on a curated basket of 15 to 30 semiconductor stocks, many of them riding the AI infrastructure wave that has defined equity markets over the past two years.
How the sausage gets made
CHPY collects premium by writing call options on its semiconductor holdings. Think of it like renting out your house on Airbnb. You get steady income, but you’ve agreed to let someone else use the property, which in financial terms means you’re capping your upside if those stocks rip higher.
But that 45.16% number deserves some scrutiny. The fund’s 30-day SEC yield sits at 0.00%. In English: the standardized yield metric that strips out return of capital and other non-income components shows essentially zero net investment income. The distributions investors are receiving aren’t purely “dividends” in the traditional sense. A significant portion likely consists of return of capital, which is your own money coming back to you, repackaged as a payout.
That distinction matters enormously. Return of capital reduces your cost basis over time, which means you could face a larger tax bill when you eventually sell. It also means the fund’s net asset value can erode during periods when the underlying stocks aren’t performing well enough to offset the capital being returned.
YieldMax’s crypto cousins
CHPY isn’t operating in isolation. YieldMax has built an entire lineup of option-income products spanning multiple sectors, and several of them target digital assets directly.
The LFGY ETF, which focuses on the crypto sector, currently sports a distribution rate of 55.19%. Then there’s YBIT, which runs Bitcoin options strategies and carries a distribution rate of around 39%. YieldMax also offers SOXY, which targets a more modest 12% distribution rate, and GPTY, focused on AI and technology sectors.
For Bitcoin holders who want income without selling their exposure, products like YBIT represent an interesting middle ground between HODLing and active trading. But the same return-of-capital concerns apply, and the structural cap on upside participation means investors would have missed a meaningful chunk of Bitcoin’s gains during strong rallies.
What this means for investors
Every dollar of premium CHPY collects by selling calls is a dollar of upside it’s surrendering. The fund effectively trades growth potential for income, which is a perfectly valid strategy, but only if investors understand they’re making that trade.
When markets are flat or declining, these funds can enter a negative feedback loop where distributions erode NAV, which reduces the premium income available from future options sales, which pressures future distributions.
For crypto-native investors, the LFGY and YBIT products raise an interesting philosophical question. DeFi protocols have offered similar or higher yields through options vault strategies for years, but with smart contract risk, limited regulatory oversight, and often opaque mechanics. These ETFs offer comparable strategies within a regulated wrapper, with daily transparency and standard brokerage access.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
English (US) · 