SPYI vs. GPIX: Navigating Income in a Bear-Scarred Market

The S&P 500 has weathered three bear markets since 2020, each testing the resilience of income-focused ETFs. As investors seek stability in a volatile landscape, SPYI (SPDR S&P 500 Income ETF) and GPIX (Goldman Sachs S&P 500 Core Premium Income ETF) stand out for their distinct strategies. Here's how they stack up in post-bear performance, income generation, and risk management.

Income Generation: Yield Sources and Strategies

SPYI leverages an options overlay strategy, selling out-of-the-money SPX call spreads to boost income. This approach generates a trailing twelve-month yield of 12.17%, sourced from both dividends and option premiums. However, its expense ratio of 0.68% reflects the cost of active management and derivatives use.

GPIX, by contrast, employs an equal-weighted portfolio of S&P 500 constituents, emphasizing dividend reinvestment. Its 8.30% yield is purely dividend-driven, with a lower expense ratio of 0.29%, making it more cost-efficient for passive investors.

Volatility Management: Drawdowns and Risk Metrics

Post-bear resilience is critical. During the 2022 downturn, SPYI's maximum drawdown was -16.47%, outperforming GPIX's -17.50% and the S&P 500's -19.7%. Its options strategy mitigates downside risk but caps upside potential, as seen in its 20.57% annualized volatility versus GPIX's 18.48%.

GPIX, with its equal weighting, reduces concentration risk inherent in cap-weighted indices. Its Sortino ratio of 1.18 edges out SPYI's 1.16, indicating better risk-adjusted returns for income-focused portfolios.

Sector Exposures: Growth vs. Diversification

SPYI's top holdings (Apple, Microsoft, NVIDIA) reflect a tech-heavy tilt, with nearly 40% exposure to the Information Technology sector. This aligns with its focus on high-beta, dividend-paying giants. While this strategy thrives in growth environments, it leaves SPYI vulnerable to sector-specific risks like AI hype cycles or supply chain disruptions.

GPIX's equal-weight approach distributes capital evenly across the S&P 500, reducing reliance on megacaps. As of Q2 2025, its top sectors include Healthcare (12.5%) and Technology (22%), but with smaller allocations to Financials and Energy. This balance offers insulation from single-sector downturns.

Current Market Conditions: Which ETF Wins?

The 2025 bear market, triggered by trade tensions and inflation fears, demands defensive income vehicles. Here's the verdict:

• SPYI's Strengths:
• High yield and tax-efficient distributions (via Section 1256 contracts).
• Proven downside protection in volatile periods.
• Weaknesses:
• Overconcentration in tech and growth stocks, risking overexposure to sector-specific downturns.

• Higher fees dilute long-term returns.

• GPIX's Strengths:

• Lower volatility and better risk-adjusted metrics.
• Diversification reduces exposure to megacap volatility.
• Weaknesses:
• Lower yield requires a trade-off between income and stability.
• Less aggressive upside potential in bull phases.

Conclusion: Rating Upgrade for GPIX

In a market where sector diversification and cost efficiency outweigh pure yield chasing, GPIX emerges as the superior income vehicle. Its equal-weight strategy softens the blow of megacap dominance while maintaining dividend resilience. We upgrade GPIX to a Buy, recommending it for portfolios seeking steady income without overexposure to tech's volatility.

SPYI remains a tactical tool for investors willing to accept higher fees and concentration risk for aggressive income. For most, GPIX's balanced approach is the safer bet in today's uncertain climate.

Investors should pair these ETFs with cash reserves and short-duration bonds to further dampen volatility. As the 2025 bear market lingers, the priority is income that outlasts the storm—not outpaces it.