Quick Read
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YYY and PCEF generate 13% and 8% monthly yields by buying closed-end funds at discounts, bypassing the NAV erosion risk tied to options strategies.
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JBBB targets mezzanine CLO tranches for floating-rate monthly income, carrying a near-zero equity beta of 0.17 and a lean 0.47% expense ratio.
Monthly income products get most of their airtime through covered call funds and preferred stock ETFs, which leaves a set of older, quieter income vehicles trading in relative obscurity. Three of them sit at the higher end of the yield spectrum without relying on option overlays: the Amplify High Income ETF (NYSEARCA:YYY), the Invesco CEF Income Composite ETF (NYSEARCA:PCEF), and the Janus Henderson B-BBB CLO ETF (CBOE:JBBB).
Each pays every month, and all of these names pull income from a structurally different place: closed-end funds trading at discounts, a diversified basket of taxable CEF strategies, and mezzanine tranches of collateralized loan obligations. The distribution rates run from the mid-single digits into the low teens, and the risk profiles are not interchangeable.
Why These Three Stand Apart From the Yield Crowd
Most of the ETFs advertising double-digit distributions right now sit inside the options-income category. YieldMax and REX products, for instance, show indicated annual dividends between 10.7% and 15.7% from daily covered-call strategies on indexes and single stocks. Those yields come with capped upside and structural NAV erosion risk.
The three funds here take a different route. Two of them (YYY and PCEF) buy closed-end funds, which can trade at persistent discounts to their net asset values. That discount capture, plus the leverage many CEFs already employ, is how they push distribution rates well past what an unlevered bond or equity fund can support. JBBB does something else entirely: it reaches into the middle of the CLO capital stack, where floating-rate coupons are meaningfully higher than what AAA tranches or investment-grade credit produce.
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YYY: A Concentrated Bet on Discounted Closed-End Funds
The highest-payout name on this list is this fund. It tracks an index of roughly 78 closed-end funds screened for yield, discount to NAV, and liquidity, and it manages about $725 million in assets. The distribution rate sits at 12.5%, which is what earns it a spot at the top of most “highest monthly yield” screens that go beyond options ETFs. YYY’s income profile comes from the underlying closed-end funds rather than options premiums.
The mechanism is straightforward. When a closed-end fund trades at a 10% discount, YYY collects distributions calculated against the fund’s full NAV while paying only the discounted market price. Layered across dozens of CEFs, that gap amplifies the effective yield reaching shareholders. The trade-off is that YYY inherits the leverage inside those CEFs, which is why the fund’s monthly payout has drifted lower over time. The distribution has been $0.12 per share every month since 2022, down from $0.16 in 2015 and 2016.
Total return over the past year came in at 11%, and the fund carries a beta of 0.71. Shares trade around $12. The main risk to understand is concentration in leveraged CEFs: when credit spreads widen, YYY’s NAV tends to move more than a plain bond fund would.
PCEF: The Diversified Way to Own the CEF Universe
This fund holds a broader slice of the taxable closed-end fund market, spanning investment-grade debt CEFs, high-yield debt CEFs, and option-income CEFs. It sits at roughly $806 million in assets across about 108 holdings, giving it materially more diversification than YYY. PCEF’s broader reach across CEF categories provides a more balanced income stream.
The distribution rate is 7.6%, which lands on the lower end of this group. PCEF’s trailing 12-month payout came to $1.54 per share, and monthly distributions have drifted from the $0.141 to $0.146 range in 2024 down to $0.11771 in July 2026 as the underlying CEFs adjusted their own payouts. One-year total return was 12%, with shares near $20.
The expense ratio is 2.71%, which sounds punitive until the structure is understood. That figure includes the acquired fund fees from the underlying CEFs, not just Invesco’s own management fee, so it is closer to a fully loaded look-through cost than a bloated wrapper fee. Investors buying any CEF individually would carry similar expenses inside those funds anyway. PCEF’s expense structure reflects the costs of its underlying holdings rather than an excessive markup at the fund level.
JBBB: The Contrarian Pick That Reaches Into the CLO Stack
The least obvious inclusion on this list, and the one most income investors have never opened a screener to find, is this fund. It buys BBB- and BB-rated tranches of collateralized loan obligations, which sit below the AAA tranches most CLO ETFs concentrate on but above the equity tranches that behave more like private credit. The fund manages roughly $1.14 billion in net assets across 223 positions, with top holdings including Tikehau US CLO VII, Regatta XVIII Funding, and multiple AGL CLO series. JBBB’s focus on mezzanine CLO tranches offers higher yield than investment-grade CLO ETFs, but with correspondingly higher credit risk.
The distribution rate lands at 6.5%, with a trailing 12-month payout of $3.07 per share. Monthly distributions in 2026 have run between $0.22 and $0.25, lower than 2024’s range of $0.25 to $0.37, reflecting the drop in short-term rates that CLO coupons float against.
Coupons reset roughly quarterly, so the fund’s yield tracks short rates in a way YYY and PCEF do not. Second, the beta is 0.17, well below anything equity-linked. Shares trade near $48, and one-year total return was 5%. The expense ratio of 0.47% is the lowest of the three by a wide margin. The catch is credit risk: mezzanine CLO tranches take losses before AAA tranches do, and a sharp uptick in loan defaults would compress both distributions and NAV.
Choosing Between the Three
An investor prioritizing the highest current cash yield and comfortable with leverage inside a fund-of-CEFs wrapper will gravitate toward YYY. A buyer who wants exposure to the same closed-end fund universe with more diversification and a smoother payout profile is better served by PCEF, accepting the lower headline rate. And an income investor who wants floating-rate protection, a low correlation to equities, and a genuine picks-and-shovels position in the leveraged loan market has a case for JBBB, even though its yield trails the other two.
The three do not compete for the same slot in a portfolio. They compete for the space around the more familiar options-income funds, and each represents a different bet on what the next few years of rates, credit spreads, and CEF discounts will look like.
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