Best Covered Call ETFs for 2026
Covered call ETFs generate income by selling call options on stocks or indices they hold, collecting premium that is then distributed to shareholders as dividends. This options-based income strategy has surged in popularity as investors seek high yields in a world where traditional bonds may not provide sufficient income. Covered call ETFs typically offer yields of 7-12%, significantly higher than most dividend stocks or bond funds.
JEPI from JPMorgan has become the poster child of the covered call ETF movement, combining equity-linked notes tied to the S&P 500 with an active management overlay that selects low-volatility stocks. XYLD from Global X writes covered calls on the S&P 500 index, providing a more systematic and transparent approach. QYLD, also from Global X, applies the same covered call strategy to the Nasdaq-100 index, offering higher premiums due to the greater volatility of tech stocks but also capping more upside potential.
The tradeoff with covered call strategies is clear: you receive enhanced income in exchange for capping your upside potential. When markets rally strongly, covered call ETFs will underperform because the sold calls limit gains above the strike price. In flat or slightly declining markets, however, the option premium provides a cushion that can result in outperformance. Understanding this tradeoff is essential for setting realistic return expectations and determining how covered call ETFs fit within your overall portfolio.
How We Rank
ETFs are ranked by assets under management (AUM). Only ETFs with $50M+ in assets are included. Data is updated daily.
| # | Symbol | Fund Name | AUM |
|---|---|---|---|
| 1 | JEPI | JPMorgan Equity Premium Income ETF | $44.02B |
| 2 | JEPQ | JPMorgan Nasdaq Equity Premium Income ETF | $34.77B |
| 3 | QYLD | Global X - Nasdaq 100 Covered Call ETF | $8.36B |
| 4 | DIVO | Amplify CWP Enhanced Dividend Income ETF | $6.52B |
| 5 | GPIX | Goldman Sachs S&P 500 Premium Income ETF | $3.24B |
| 6 | XYLD | Global X - S&P 500 Covered Call ETF | $3.16B |
| 7 | GPIQ | Goldman Sachs Nasdaq-100 Premium Income ETF | $3.10B |
| 8 | ACIO | Aptus Collared Income Opportunity ETF | $2.14B |
| 9 | FTHI | First Trust BuyWrite Income ETF | $2.02B |
| 10 | TLTW | iShares 20+ Year Treasury Bond BuyWrite Strategy ETF | $1.79B |
| 11 | RYLD | Global X - Russell 2000 Covered Call ETF | $1.30B |
| 12 | BUYW | Main BuyWrite ETF | $1.10B |
| 13 | IDVO | Amplify CWP International Enhanced Dividend Income ETF | $1.04B |
| 14 | ULTY | YieldMax Ultra Option Income Strategy ETF | $949.4M |
| 15 | QDTE | Roundhill Investments - Innovation-100 0DTE Covered Call Strategy ETF | $861.0M |
| 16 | BALI | iShares U.S. Large Cap Premium Income Active ETF | $840.5M |
| 17 | FTQI | First Trust Nasdaq BuyWrite Income ETF | $771.0M |
| 18 | FEPI | REX FANG & Innovation Equity Premium Income ETF | $596.6M |
| 19 | HEPZF | Global X Gold Producer Equity Covered Call ETF | $506.8M |
| 20 | NBOS | Neuberger Berman Option Strategy ETF | $448.3M |
| 21 | WTPI | WisdomTree Equity Premium Income Fund | $435.8M |
| 22 | AIPI | REX AI Equity Premium Income ETF | $375.9M |
| 23 | XDTE | Roundhill Investments - S&P 500 0DTE Covered Call Strategy ETF | $328.3M |
| 24 | PBP | Invesco S&P 500 BuyWrite ETF | $322.7M |
| 25 | HEDG | Equable Shares Hedged Equity ETF | $301.0M |
What to Look For
The distribution yield is the headline number, but look beneath it — some of the yield may come from return of capital rather than true option premium income. Check the fund's call-writing methodology: does it sell at-the-money calls, out-of-the-money calls, or use a spread strategy? This determines how much upside you give up.
Compare the expense ratio, which ranges from 0.35% to 0.60% for major covered call ETFs. Also examine the underlying portfolio — some funds hold the actual index constituents, while others use equity-linked notes or derivatives for exposure. Monthly distribution frequency is standard in this category and is a key attraction for income investors.
Which Covered Call ETFs Is Best for You?
JEPI is the most popular covered call ETF and for good reason. Its active management approach selects defensive, low-volatility stocks while generating income through equity-linked notes. This combination provides downside protection along with high monthly income. JEPI typically yields 7-9% and has attracted enormous inflows from retirees and income-focused investors.
XYLD provides a more transparent, rules-based covered call strategy on the S&P 500 index. It writes monthly at-the-money calls on the entire index, which generates high premiums but caps virtually all upside. XYLD typically yields 10-12% and is best for investors who prioritize maximum income over capital appreciation potential.
QYLD applies the covered call strategy to the Nasdaq-100, which generates higher premiums due to the greater implied volatility of tech stocks. QYLD offers among the highest yields in the covered call space, typically 10-12%, but it also gives up the most upside potential. It is suited for investors who want maximum income from tech-heavy exposure without the full volatility of the Nasdaq-100.