The analysis indicates that a portfolio of three ETFs can generate $40,000 in annual income from a $500,000 investment without drawing on the principal.

Yahoo Finance analysis notes that by investing in a portfolio consisting of the NEOS S&P 500 High-Yield ETF (SPYI), the Amplify CWP Enhanced Dividend Yield ETF (DIVO), and the Virtus InfraCap U.S. Preferred Stock ETF (PFFA), investors can expect to generate $40,000 in annual income from a $500,000 investment without touching their principal. This would require a combined yield of approximately 8%.

Specifically, SPYI offers a low double-digit yield through an options-covered strategy; DIVO provides a mid-single-digit yield by tactically selling call options on blue-chip stocks; and PFFA delivers a yield close to 10% by investing in leveraged preferred securities. The article argues that allocating assets roughly equally among these three ETFs can achieve the aforementioned annualized return target.