Unpacking the UltraYield™ Edge: A Deep Dive into Canada’s Most Aggressive Income Strategy
By Yonatan Brunshtein
The year 2026 has ushered in a new era for Canadian income investors. After two years of stubbornly high interest rates and persistent market volatility, the traditional 60/40 portfolio is effectively "broken" for retirees and institutions chasing real cash flow. Standard dividend stocks yield 4-5%, GICs barely keep pace with inflation, and generic covered call ETFs often cap upside, leaving investors frustrated.
But amidst this challenge, a clear leader is emerging from Toronto: Evolve Funds Group Inc.
My recent institutional audit of Evolve's 2026 lineup reveals a deliberate, strategic masterclass in generating double-digit yields, managing tax efficiency, and capturing thematic growth. Forget the generic product sheets—we've peeled back the layers to uncover the "secret sauce" powering their UltraYield™ suite, and it boils down to a single, critical number: 33%.
The "Leverage-First" Revolution: Why 1.33x Changes Everything
While many of Canada's leading income providers (like Hamilton and Harvest) have long relied on a 1.25x (25%) leverage model to boost payouts, Evolve has decisively moved the goalposts. Their flagship UltraYield™ funds—including the Canadian-focused $CANY, the U.S. juggernaut $BIGY, and the newly launched international play $INTY—all employ a robust 1.33x (33%) leverage ratio.
This isn't just a minor tweak; it's a fundamental shift that provides a critical advantage:
More "Inventory" for Options: By taking on an additional 8% in market exposure compared to the 1.25x standard, Evolve's funds have a larger asset base from which to write covered calls. This means higher premiums can be generated, directly translating into more frequent and substantial distributions for investors.
Enhanced Distribution Potential: In My analysis, this extra leverage allows Evolve’s UltraYield™ funds to target and sustain double-digit annual yields (often 10%+), paid out twice per month. This semi-monthly payment schedule is a game-changer for clients requiring consistent, pension-like cash flow.
A "Buffer" Against NAV Erosion: In choppy markets, the additional asset base from 1.33x leverage provides a stronger "buffer" to maintain distributions without having to excessively dip into the fund's net asset value (NAV). It's a strategic move to ensure sustainability.
Consider this snapshot from my full 15-page report
Source: Evolve Funds Group Inc., January 2026 Audit by Yonatan Brunshtein)
This table highlights a core truth: Evolve has architected a system to extract maximum yield from the market, offering payouts that meaningfully exceed traditional income alternatives while investing in core equity holdings like the Magnificent Seven, Canadian banks, and top-tier international firms.
Beyond the Yield: The Tactical Advantage of Active Management
While leverage sets the stage, Evolve's execution is refined through a critical strategic choice: active, discretionary option management. This stands in stark contrast to many rules-based covered call ETFs that operate on fixed, predetermined strategies.
My audit revealed that Evolve’s portfolio managers possess the flexibility to:
Dial Back Call Writing: In strong bull markets (like segments of 2025), Evolve can strategically reduce its call overlay to capture more capital appreciation, allowing investors to participate in upside that rules-based funds might cap.
Amplify Premiums: In volatile periods, managers can increase the covered call percentage or target more aggressive strike prices, effectively turning market choppiness into enhanced cash flow.
This tactical flexibility was a major contributor to some of Evolve's stellar performance in 2025, where funds like $EBNK (European Banks Enhanced Yield) returned an astonishing +61.91%, leveraging strong underlying market trends while harvesting significant option premiums.
The Tax-Forward Philosophy: Keeping More of What You Earn
For high-net-worth clients, a high headline yield means little if it's inefficiently taxed. Evolve's distributions are not just large; they are strategically structured for Canadian taxable accounts.
My analysis of their 2025 distributions shows a conscious effort to utilize:
Capital Gains: Option premiums are typically taxed as capital gains (only 50% taxable), making them more efficient than fully taxable interest income from GICs or bonds.
Return of Capital (ROC): Evolve strategically employs ROC, which defers tax liabilities by reducing an investor's Adjusted Cost Base (ACB). This means cash in hand today, with the tax event pushed into the future—a powerful tool for long-term wealth compounding.
Eligible Dividends: Where possible, distributions from Canadian equities qualify for the enhanced dividend tax credit, further optimizing after-tax returns.
This multi-faceted approach to distribution characterization ensures that investors not only receive a high income but also retain a larger portion of it after taxes, directly impacting their real spending power and long-term portfolio growth.
The Full Story: Why Evolve is the Definitive Choice for 2026 Income
The 33% leverage, active management, and tax-forward strategies are just a few facets of Evolve's comprehensive approach. My 15-page institutional audit delves deeper into:
The "Global Income Loop": How the UltraYield™ suite enables 100% geographically diversified portfolios yielding over 10%.
Digital Asset Dominion: Evolve's industry-leading suite of spot and levered crypto ETFs ($LBIT, $LETH) and their unique "tax-cleansing" special distributions.
The Innovation Engine: Active AI ($ARTI) and thematic growth plays that avoid "Magnificent Seven" concentration risk.
Operational Alpha: How Evolve’s deep Designated Broker network provides "implied liquidity" far beyond daily trading volumes, enabling seamless multi-million dollar block trades.
Competitive Breakdown: A head-to-head comparison with Hamilton, Harvest, Global X, and BMO, highlighting Evolve's unique structural advantages.
Portfolio Construction Models: Practical "how-to" guides for advisors to integrate Evolve funds into a modern 60/40, generating income every week of the month.
Disclaimer: This report is for informational purposes only and does not constitute financial advice. Audit performed by Yonatan Brunshtein, Independent Market Analyst.
Interested in the complete 15-page Institutional Audit of Evolve Funds Group Inc.? DM me directly to receive the full report.
