Not registered. Not advice. DecodeETF is an information service. We are not registered as an adviser, dealer, or investment fund manager with the Ontario Securities Commission or any Canadian provincial regulator. Nothing on this site is a recommendation, solicitation, or offer to buy or sell any security. Past performance is not indicative of future results, and all investing carries risk including the loss of principal. Speak with a registered financial professional before making investment decisions.
Global X
10.2% headline yield, and 64% of it is classified as return of capital. Paying out more than the income the fund earned is how a covered-call or leveraged wrapper works: the distribution can include option premium or realized gains that receive ROC tax treatment. Over the last 3 years its capital grew 6%/yr.
Payout over time
Fund health
This fund sells call options on its holdings in exchange for the cash it distributes. The return split below shows how much of this fund's own return came from price versus distributions; the full comparison against its plain twin NRGY.TO is further down this page.
Where the 3-year return came from
3-year annualized, on a shared scale: bars left of the line are negative. Capital appreciation is the fund's own unit-price change; income return is the contribution from distributions being reinvested. The two combine (multiplicatively) to the total return.
How it's taxed
The CRA taxes each distribution dollar by its character. These shares are measured against the full taxable distribution, including any portion the fund reinvested as units rather than paying in cash.
| Character | % of taxable | $ / unit |
|---|---|---|
| Eligible dividends | 15% | $0.2197 |
| Capital gains | 21% | $0.3000 |
| Return of capital | 64% | $0.9203 |
For a covered-call or leveraged fund, return of capital can include option premium or realized gains classified as ROC for tax purposes, not your capital handed back. It still lowers your cost base, so the deferred tax can increase a later capital gain or reduce a later capital loss when you sell. If return of capital keeps building up and your cost base reaches zero, any further return of capital is taxed as a capital gain in the year you receive it, not deferred to a sale.
Fund vs plain twin
NRGY.TO is a comparable plain-vanilla fund in the same space, without the options or leverage overlay.
| Last 12 months | ENCC.TO Global X Canadian Oil and Gas Equity Covered Call ETF | NRGY.TO Global X Equal Weight Canadian Oil & Gas Index ETF |
|---|---|---|
| Distribution yield | 10.2% | 2.8% |
| Total return (1y) | 39.6% | 50.4% |
| Capital growth (1y) | 23.0% | 44.7% |
| Growth of $100, reinvested | $140 | $150 |
| Growth of $100, not reinvested | $123 | $145 |
ENCC.TO paid about 7.3pp more distribution yield (trailing 12 months), but NRGY.TO earned +10.8pp more in total return over the last 12 months. Covered-call funds sell call options on their holdings, which can limit how much upside they keep in exchange for the cash they distribute.
Recent dividend activity in holdings
What Premium adds
Next steps
Prices as of 2026-07-27. Distributions as of 2026-07-28. Tax character year 2025.
We break down what Canadian ETF investors need to know. Free. No account needed. Unsubscribe anytime.
Coverage 2.1×: The fund paid a 10.2% distribution rate against a 21.3% a year total return; the total return was at least the current distribution rate over this window.
Of the 10.2% distribution rate, 1.6 points were classified as recurring income in the latest T3 tax-character split (dividends, interest, foreign income); the rest was capital gains and return of capital.
Why the price moved
No comparable plain-basket twin is mapped for this fund, so a benchmark price comparison is not shown.
Own payout record
Cash distributed per unit, by calendar year, from the fund's own distribution history (up to the last 6 years). "Reduced" marks a year where the cash paid per unit fell more than 5% versus the prior year.
Based on Global X's 2025 T3 / tax-factor filing. Character can vary year to year. This is not tax advice; consult a tax professional about your situation.
What you keep, in your account
Each figure below starts from the headline yield of 10.2% and shows an estimate of what you keep after tax. Where you hold the fund changes the answer: a TFSA shelters Canadian tax and can still lose foreign withholding tax when the fund has foreign withholding, a non-registered account taxes each character at its own rate, and an RRSP defers tax until you withdraw.
These figures are estimates at the top ON marginal tax rate, not your personal rate. The return-of-capital portion is not taxed now: it lowers your cost base, so more of your eventual sale is taxed as a capital gain instead.
Illustrative, not tax advice.
Trailing 12-month cash yield; 3-year annualized total and price return. Past performance is not indicative of future results.