"A new type of exchange-traded fund is gaining popularity in sync with retail's fascination with options trading. ETFs like JPMorgan Equity Premium Income ETF (NYSEARCA:JEPI), JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ), and NEOS Nasdaq-100 High Income ETF (NASDAQ:QQQI) get you exposure to your favorite indexes and hand you a monthly paycheck. Two years ago, an ETF that handed you a yield in the high single digits or even double digits, let alone get you Nasdaq-100 or S&P 500 exposure, would've been a pipe dream."
"Today, ETFs with these characteristics are available, and there are numerous options. Retirees and income investors are increasingly increasing their exposure to these ETFs due to the juicy yield plus the upside potential. We'll be looking into three such popular ETFs that rent the upside away through systematic call writing, then mail you fat checks. Together, they have pulled in billions in 2024 and so far in 2025."
Exchange-traded funds that use systematic call writing and options-overlay strategies have attracted significant investor interest by combining broad index exposure with monthly income. Examples include JEPI, JEPQ, and QQQI, which sell out-of-the-money call options or gain similar exposure via equity-linked notes to collect option premiums. Income investors receive elevated dividend yields (JEPI yields 8.35%) while paying reasonable fees (JEPI expense ratio 0.35%). The covered-call approach surrenders most upside in exchange for premium income but leaves investors exposed to downside market risk. These funds drew billions of inflows across 2024 and into 2025 as retirees pursue steady payouts alongside equity participation.
Read at 24/7 Wall St.
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