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  5. PAYF: What do you think of these etfs and what is the difference between them? [Purpose Enhanced Premium Yield Fund]
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Investment Q&A

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Q: What do you think of these etfs and what is the difference between them? Do you like one better than the other?
Asked by Carla on September 17, 2025
5i Research Answer:

PYF: Assets are $338M, yield 7.62%, 5-year return 6.90%, fees 0.33%. The fund uses call options to enhance income and buys put options to protect against some downside risks. But note that return of capital is a big component of return. So while yield is high, the unit value has declined from $19.55 in 2016 to $17.33 today. Unit value has declined in all but two of its years since inception. But, for a relatively lower risk 7% return, it has done what it has intended. We would not consider it that great, however.

PAYF is much smaller at $39M, fees 0.75%, yield 8.52%, 5 year 8.53%. 

The main difference between the ETFs PYF (Purpose Premium Yield Fund) and PAYF (Purpose Enhanced Premium Yield Fund) is their strategy in selling put options: PYF uses a more conservative approach, typically selling puts 8–10% out-of-the-money for stable yield, while PAYF pursues higher yield by selling puts only 3–5% out-of-the-money, accepting greater equity risk for enhanced income.

We would prefer PYF.