3 High-Income ETFs Most Investors Overlook, One Yields 14% Monthly

Income investors have been quietly migrating over the past two years toward a newer category of funds that generate cash flow from options premiums rather than corporate dividends. Three Nasdaq-100-focused options-income ETFs are still overlooked by most yield hunters, with one paying a 14% monthly yield.

The Three Overlooked ETFs

• NEOS Nasdaq-100 High Income ETF (QQQI): Pays a 14% monthly yield through a covered call strategy on the Nasdaq-100 index.
• Amplify CWP Growth & Income ETF: Focuses on growth and income via a mix of equities and options.
• A third fund: Not named in the original report, but follows a similar strategy.

How These ETFs Work

These funds sell covered call options on the index's constituent stocks, generating premiums that are distributed as monthly income. In return, this strategy caps potential capital gains.

Context

With bond yields remaining low and equity markets volatile, investors are seeking alternative income sources. Options-income ETFs offer higher yields than traditional dividends but carry additional risks.

What This Means for Investors

These ETFs may suit investors seeking high monthly income, but it's crucial to understand the risks associated with options strategies, especially in bear markets. Diversification is recommended.