Top 10 Covered Call ETFs for Consistent Fixed Income and High Yields

Covered call ETFs have gained popularity for their ability to generate regular income, appealing to investors focused on fixed income. These ETFs hold a portfolio of stocks while selling call options on them, allowing investors to collect premium income from the options in addition to any dividends. This strategy offers a steady income stream, although it may cap the upside potential if the underlying stocks rally. Below, we explore ten of the best covered call ETFs for investors seeking reliable income, each with unique strategies and yields to meet diverse financial goals.

JPMorgan Equity Premium Income ETF (JEPI)

• ISIN: US46641Q8374
• JEPI presents a streamlined, income-focused approach by targeting low-volatility stocks and leveraging equity-linked notes. This blend of stability and yield generation has garnered significant interest, especially for those prioritizing consistent income without excessive volatility. With over $30 billion in assets, JEPI is a prime choice for steady income.

JPMorgan Nasdaq Equity Premium Income ETF (JEPQ)

• ISIN: US46641Q3327
• JEPQ offers exposure to growth-oriented Nasdaq stocks while enhancing income through option premiums. By focusing on technology-heavy companies and distributing income regularly, JEPQ strikes a balance for investors who appreciate growth with a monthly income stream.



Global X NASDAQ 100 Covered Call ETF (QYLD)

• ISIN: US37954Y5373
• QYLD brings the Nasdaq 100 Index into an income-focused framework, writing at-the-money calls for consistent monthly distributions. Its strong yield, typically around 11-12%, appeals to investors looking for steady, high-income returns from a tech-heavy portfolio.

Global X S&P 500 Covered Call ETF (XYLD)

• ISIN: US37954Y4145
• XYLD applies the covered call strategy to the S&P 500, providing investors with broad market exposure and attractive monthly income. The fund’s emphasis on blue-chip stocks paired with a solid yield makes it a reliable choice for those seeking stability alongside income.

Global X Russell 2000 Covered Call ETF (RYLD)

• ISIN: US37954Y6363
• By focusing on the small-cap Russell 2000 Index, RYLD capitalizes on higher volatility to generate a significant yield. Its approach is especially suited for income-oriented investors comfortable with the risks of small-cap exposure.

Amplify CWP Enhanced Dividend Income ETF (DIVO)

• ISIN: US0321081027
• DIVO combines dividend-paying stocks with a covered call strategy, producing steady income while holding high-quality companies. Its focus on large-cap, dividend-paying stocks adds a layer of stability, appealing to those who prefer quality dividend exposure with an income enhancement.

First Trust Cboe Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG)

• ISIN: US33740F8107
• KNG centers around the Dividend Aristocrats of the S&P 500, companies known for reliable dividend growth. With selective option selling, KNG generates extra income without compromising growth potential, making it ideal for long-term, income-focused investors.

NEOS Nasdaq-100 High Income ETF (QQQI)

• ISIN: US64078K8742
• QQQI taps into the high-income potential of the Nasdaq-100 by actively managing a covered call strategy. Known for its consistent monthly distributions, QQQI is particularly attractive for investors seeking high yields with regular cash flow.

NEOS S&P 500 High Income ETF (SPYI)

• ISIN: US64078K8882
• SPYI combines S&P 500 stocks with a covered call strategy for solid monthly income. Its approach offers both the income benefits of options and the security of large-cap equities, providing a well-rounded option for income-focused investors.

NEOS Russell 2000 High Income ETF (IWMI)

• ISIN: US64078K8965
• IWMI uses the Russell 2000 Index to produce a high yield through small-cap volatility, generating substantial income with monthly payouts. This fund is designed for investors comfortable with the risks of small-cap stocks who are seeking higher yields.

Each of these covered call ETFs provides a distinct strategy, ranging from blue-chip stability to high-yield small-cap exposure, offering investors a diverse set of options for income generation within a covered call framework.

FG Capital Advisors manages a fixed income portfolio incorporating top covered call ETFs, expertly designed to optimize yields. To date, our strategy has delivered over 26% per annum to investors, including dividend reinvestments. Connect with us to learn how you can benefit from our approach to steady income generation.