TSPY: A Tier Four ETF

At first glance, TSPY and SPYI might look like the same investment.

After all, both seek to generate monthly income while providing exposure to the S&P 500.

But they don't accomplish that goal in the same way.

Each fund has its own approach to generating income, managing options, and serving shareholders.

That's one of the reasons I own both.

I'm not looking for identical income engines.

I'm looking for diversification — even among my covered call ETFs.

TSPY brings its own unique philosophy to the table, and one management decision in particular convinced me it deserved a place in my Tier Four portfolio.

Key Statistics

Ticker: TSPY
Tier: Tier Four
Investment Style: S&P 500 Enhanced Income
Fund Inception: 2024
Expense Ratio: Approximately 0.95%
Underlying Exposure: Vanguard S&P 500 ETF (VOO)
Distribution Frequency: Monthly

TSPY seeks to provide investors with attractive monthly income while maintaining broad exposure to the S&P 500 through an actively managed covered call strategy.

Why TSPY Fits Tier Four

Tier Four is designed to enhance the retirement income already built through Tiers One, Two, and Three.

The objective isn't replacing your core dividend portfolio.

It's adding additional income engines that complement the dependable dividend income already being generated.

TSPY accomplishes exactly that.

It allows investors to continue participating in the performance of America's largest companies while generating additional monthly income through options.

That's exactly the role I want it to play.

What Does TSPY Own?

TSPY owns the Vanguard S&P 500 ETF (VOO).

That means investors indirectly own many of the same outstanding businesses featured throughout my 50-stock series.

Companies like Microsoft (MSFT), Visa (V), Home Depot (HD), Procter & Gamble (PG), AbbVie (ABBV), Broadcom (AVGO), JPMorgan Chase (JPM), McDonald's (MCD), Coca-Cola (KO), and many others all contribute to the portfolio.

In other words...

TSPY starts with one of the best diversified collections of businesses in the world.

Where This Income Comes From

TSPY generates income from two different sources.

First...

The companies inside the S&P 500 pay dividends.

Those dividends flow through to the fund.

Second...

TSPY sells extremely short-term covered call options on its S&P 500 exposure.

Think of it this way.

Other investors pay TSPY for the opportunity to potentially participate in short-term market movements.

Those payments are called option premiums.

Whether the options are exercised or not, TSPY keeps those premiums.

The combination of stock dividends and option premiums creates the fund's monthly distributions.

In simple terms...

The companies provide the dividends.

Market volatility provides the option premiums.

Together, they create a powerful retirement income stream.

Why I Like TSPY

The reason I chose TSPY goes beyond its income strategy.

It's about management.

One decision in particular stood out to me.

The fund originally used SPY as its underlying S&P 500 investment.

Then management voluntarily switched to VOO.

Why?

Because VOO charges an expense ratio of just 0.03%, compared to 0.09% for SPY, while providing essentially the same exposure to the S&P 500.

That simple decision reduced costs for shareholders.

Management didn't have to do that.

There wasn't a flashy marketing campaign built around it.

There wasn't a headline announcing a revolutionary new strategy.

It was simply the right thing to do.

Those are exactly the kinds of decisions I want to see from the people managing my money.

When a management team consistently looks for ways to improve shareholder outcomes — even in small ways — it gives me confidence they're thinking like long-term investors rather than product marketers.

Who Is This ETF For?

TSPY is ideal for investors who:

Are building a Tier Four portfolio.
Want broad exposure to the S&P 500.
Prefer monthly income.
Want a professionally managed covered call strategy.
Appreciate shareholder-focused management.

For me, TSPY has become one of the cornerstone income ETFs in my Tier Four portfolio.

Why TSPY Earned My Trust

There are plenty of covered call ETFs available today.

Many generate attractive yields.

Very few have earned my confidence the way TSPY has.

The decision to reduce underlying expenses by switching from SPY to VOO wasn't a dramatic change.

But investing success is often built on dozens of thoughtful little decisions.

This was one of them.

It demonstrated that management was willing to improve shareholder outcomes simply because it was the right thing to do.

That tells me a great deal about the culture behind the fund.

Final Thoughts from the DGI Crab

TSPY gives me exactly what I'm looking for from a Tier Four ETF.

Broad exposure to America's greatest companies. Monthly income. A disciplined covered call strategy. And a management team that appears committed to putting shareholders first.

If I had to summarize TSPY in one sentence, it would be this:

Own the S&P 500 while letting a shareholder-focused management team enhance the income.

That's exactly why TSPY has earned its place as one of my favorite Tier Four ETFs.

DGI Crab Summary

Role in the Portfolio: Generate dependable monthly income from America's largest companies.

Where This Income Comes From: Dividends paid by the companies in the S&P 500 plus option premiums generated through the fund's covered call strategy.

Should This Replace My Tier Three Holdings? No. Tier Four is designed to enhance the dependable dividend income you've already built in Tiers One through Three. The exception is investors beginning their investing journey later in life, where building around high-quality income ETFs and reinvesting distributions through DRIP can be a practical way to grow retirement income.