Principal Active High Yield ETF (YLD) Covered Calls

Principal Active High Yield ETF is an actively managed fund that seeks to provide high current income. The fund primarily invests in below-investment-grade (high-yield or "junk") fixed-income securities, U.S. Treasury securities, and preferred stocks. By utilizing active management, the fund aims to capitalize on market inefficiencies in the corporate credit space while maintaining a focus on risk-adjusted returns.

You can sell covered calls on Principal Active High Yield ETF to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for YLD (prices last updated Fri 4:16 PM ET):

Want to make money with covered calls?  Sign Up For A Free Trial

Core Business and Products

Principal Active High Yield ETF (YLD) is a specialized income vehicle that provides exposure to the non-investment grade corporate bond market. Unlike passive ETFs that track a static index, YLD is actively managed, allowing the investment team to selectively navigate credit risks and interest rate sensitivity. In 2026, the fund manages approximately $490 million in assets and maintains a disciplined focus on U.S. dollar-denominated "junk" bonds.

The fund’s strategy involves three main components:

1. High-Yield Corporate Bonds: The core of the portfolio (at least 80%), targeting issuers with attractive yield-to-worst profiles in sectors like energy, industrials, and technology.
2. Strategic Cash & Treasuries: Used tactically to manage liquidity and mitigate downside during periods of credit spread widening.
3. Senior Floating Rate Interests: Selectively included to provide a hedge against rising interest rates while maintaining income.

Key holdings in 2026 include diversified positions in Matador Resources, Icahn Enterprises, and Carvana Co, with no single issuer typically exceeding 2% of the fund to minimize concentration risk.

Competitive Landscape

YLD operates in the crowded High Yield Bond category but differentiates itself through an institutional-grade active management team at a highly competitive 0.39% expense ratio—pricing it similarly to many passive peers. While YLD is fully optionable, its options volume is significantly lower than that of its massive iShares counterparts. It is primarily utilized by income-focused investors who value the potential for alpha over a rigid index-tracking approach.

Key peers and related high-yield investment vehicles include:

1. iShares iBoxx $ High Yield Corporate Bond ETF: The liquid benchmark for the high-yield sector and YLD’s primary institutional competitor.
2. SPDR Bloomberg High Yield Bond ETF: A major low-cost passive peer that tracks the broader high-yield market.
3. iShares 0-5 Year High Yield Corporate Bond ETF: A shorter-duration peer that competes for investors looking to minimize rate risk.
4. iShares Fallen Angels USD Bond ETF: A thematic peer focusing on bonds recently downgraded from investment grade.
5. BondBloxx USD High Yield Bond Sector Rotation ETF: A peer that uses a momentum-based approach to navigate credit cycles.

Strategic Outlook and Innovation

In 2026, YLD’s strategic focus is on "Quality High Yield." With corporate default rates remaining a key concern, the active management team prioritizes "B" and "BB" rated bonds over the more speculative "CCC" tier. The fund’s monthly distribution—most recently $0.1161 in April 2026—provides a steady 7.3% trailing yield, which has remained resilient despite market volatility.

Innovation at Principal involves the use of proprietary credit modeling to identify "rising stars"—companies poised for an upgrade to investment grade—before the market fully prices in the shift. This forward-looking approach has allowed YLD to maintain a high capture ratio during market upswings while offering superior protection during drawdowns. For investors seeking a core credit holding that doesn’t just "buy the index," YLD remains a premier actively managed choice.

Want more examples? YINN Covered Calls | YMAG Covered Calls