Apple Inc.'s dominance in global markets has given rise to a rather peculiar investment enigma: millions of investors are already heavily invested in the iPhone maker, yet a round of ETFs is attempting to sell them even more Apple stock, albeit in the form of income-generating vehicles.

Consider broad market funds such as the SPDR S&P 500 ETF Trust or technology-centric investments such as the Vanguard Information Technology ETF. Apple is not merely a prominent holding in these funds; in many instances, it is the single largest holding, accounting for between 6% and 16% of the fund portfolios. Even diversified funds, such as the Vanguard Growth Index Fund ETF, have double-digit exposure to Apple.

In all likelihood, investors are already invested in Apple, whether they wanted to or not.

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Now the twist. The YieldMax AAPL Option Income Strategy ETF offers a very different proposition: don’t just hold Apple, but monetize Apple.

It employs synthetic leverage and options techniques like the sale of covered calls to generate income, which translates to its spectacular distribution yield of over 70%. It also offers weekly payouts to its investors, which is perfect for income-loving retail traders.

It is like having your cake and eating it too.

But as the saying goes, there’s no free lunch.

Covered call writing techniques involve sacrificing the upside potential of the underlying stock. If the stock goes up, the shareholder can benefit from the full appreciation of the stock price. But funds like APLY forgo this advantage in exchange for income.

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Furthermore, the fund has a high expense ratio of 1% and distribution costs that reduce its net asset value.

The end result? While the stock price of Apple has appreciated around 20% over the past year or so, the stock price of APLY has moved in the opposite direction by the same magnitude.

But the thing is, it gets tricky when an investor holds these broad-based ETFs and APLY, as they may be inadvertently doubling down on the investment in Apple, once for growth and once for income.

This also raises the larger question of whether these products are truly providing portfolio diversification or whether they're simply concentrating risk in a more complex form.

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For investors already holding broad ETFs, adding the APLY doesn't introduce diversification — it increases concentration.

Funds like the SPY and VGT already allocate a significant share to Apple. Layering APLY on top effectively stacks another Apple-linked position, just via options instead of equity.

The structure may look different, but the core exposure is the same. In fact, in some ways, risk is amplified. Investors are now tied not only to Apple's performance but also to the mechanics of options strategies, including capped upside and potential capital erosion.

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This article Apple Stock Is Already A Portfolio Staple — And This ETF Is Turning It Into A Casino Chip originally appeared on Benzinga.com