Two High Yield ETFs For Conservative Investors

I am becoming obsessed with a new type of ETF called autocallable funds. The first of this group launched in April 2025. Now, with recent additions, my list includes 20 autocallable strategy ETFs. While the premise of expected returns is pretty straightforward, they get there with a complicated, hard-to-understand strategy. If the funds work as forecast, they could change the face of high-yield investing.

A good indicator of this ETF’s potential is that ProShares launched three autocallable funds in August.

These ETFs own portfolios of what Wall Street calls structured notes. Wall Street has sold these notes to high-net-worth investors for years. A note starts with a specified index. A barrier is set at 30% to 40% below the current index value. As long as the index stays above the barrier, the note pays monthly interest. The notes are automatically callable if the index exceeds a higher level after a non-callable period.

Each ETF has its own selected structure for the notes, and there is great variation between the funds. Trying to decipher the notes can lead you down a rabbit hole of what-ifs. We have had fund managers from several of these ETFs join us for live Q&A webinars with our newsletter subscribers.

For me, the investment potential of these ETFs is that average annual returns will end up very close to the distribution rates, which range from high single digits to about 20%. Share prices will be significantly less volatile than stock market indexes, and if a barrier is not breached, the share price will stay on a level path.

Let’s look at a couple of these ETFs.

The Simplify Target 15 Distribution ETF (XV) was the first of this new breed of ETFs. It launched in April 2025. The fund targets a 15% distribution rate, and the current rate is 14.84%. More importantly, the average annual return through the end of July was 17.1%. XV is living up to the autocallable ETF expectations.

The ARK Active Autocallable Income ETF (ARKY) launched on August 19, 2026. This fund intrigues me because it holds notes on individual stocks from ARK’s innovation stocks universe. These are high-growth-rate stocks with significant volatility. The stock selection suggests that ARKY focuses on capital appreciation as well as above-average income. The portfolio has not yet paid a dividend, but its weighted-average coupon is 27.68%.

The complicated structures of these ETFs make them very hard to analyze. The proof will be in the results, which, for newer funds, will take months to show. I will be tracking results to make sure the best of the bunch are in my recommended portfolios. I believe autocallable ETFs have the potential to improve high-yield investing.