Amplify High Income ETF [YYY] Stock Forecast

Amplify High Income ETF is an exchange-traded fund of closed-end funds implementing a rules-based strategy. The yield is attractive, but history shows a steady decay in value and distributions.

VettaFi's Associate Director of Research, Roxanna Islam, joined the Active Investment Company Alliance's The NAVigator podcast and host Chuck Jaffe to talk ETFs, and specifically, buying closed-end funds in the ETF wrapper.

If you're looking for the best closed-end funds (CEFs) to buy, it helps if you understand what they are and aren't. They are similar to initial public offerings (IPOs) and stocks in that an amount of capital is raised at the launch.

Many investors are unfamiliar with the closed-end fund structure or uncomfortable with their premium/discount volatility. There are only a few options for ETFs of CEFs, but they are all very different strategies and may appeal to different types of investors.

Closed-end funds are known for their high distribution rate and potential to provide current income. But many investors are unfamiliar with their structure or uncomfortable with their premium/discount volatility.

PCEF: A 9% Yield ETF With A Concerning Track Record

Three out of 22 CEF sectors positive on price and 5 out of 22 sectors positive on NAV last week. Delaware/Abrdn mergers are closed.

YYY takes a fund-of-funds approach to investing in CEFs. It pays a forward yield of 11.3%.

YYY's share price has lost about 40% since 2013. Its monthly distribution has shrunk by 37% at the same time.

PCEF and YYY are both CEF fund of funds. Both funds share many similarities, have strong yields, and are popular investments in retirement circles.