Best Covered Call ETFs in 2026

How We Chose These ETFs

Selecting the right ETFs for covered call etfs investors requires a careful evaluation of multiple factors. We analyzed dozens of funds across the industry and narrowed our recommendations based on the following criteria. Each factor was weighted according to its importance for investors in this specific category, ensuring that our picks are truly optimized for your goals.

1. Enhanced income yields — Enhanced income yields significantly higher than traditional dividend ETFs
2. Monthly distributions for — Monthly distributions for regular cash flow needs
3. Reduced volatility compared — Reduced volatility compared to holding the underlying stocks directly
4. Options premium acts — Options premium acts as a partial buffer during modest market declines

We also factored in our proprietary Beginner Suitability Score, which evaluates each fund on a 1-to-10 scale considering expense ratios, volatility (beta), diversification (holdings count), dividend history, and track record length. Funds that score consistently high across these dimensions earned a spot on our list.

1. JPMorgan Equity Premium Income ETF (JEPI) — Best Overall

JPMorgan • Covered Call

JEPI uses a unique strategy combining a portfolio of low-volatility S&P 500 stocks with equity-linked notes that generate income from selling call options on the S&P 500 index. This approach aims to deliver monthly income that far exceeds traditional dividend funds while reducing overall portfolio volatility. It has quickly become one of the most popular income ETFs due to its consistent high monthly distributions.

JPMorgan Equity Premium Income ETF earns its spot as our best overall pick because it delivers on the metrics that matter most for covered call etfs investors. With an expense ratio of just 0.35%, you keep more of your returns working for you over time. The fund manages $35.0B in total assets, which speaks to its popularity and ensures strong liquidity with tight bid-ask spreads when you buy or sell shares.

Over the past five years, JEPI has delivered a total return of 8.00%, outperforming many of its peers and rewarding patient, long-term investors. The fund holds 130 individual securities, giving you solid diversification across a meaningful number of positions. Its beta of 0.55 indicates that the fund is significantly less volatile than the broader market, making it a more stable choice for conservative investors.

JEPI currently pays a dividend yield of 7.50%, providing investors with a stream of regular income on top of capital appreciation. Dividends are typically distributed quarterly and can be automatically reinvested through most major brokerages, accelerating the compounding process. With a track record stretching back to 2020, JEPI has a relatively shorter but still notable history that investors should consider alongside its other strengths. Our Beginner Suitability Score rates it 9/10 (Great for Beginners), reflecting its excellent combination of low costs, manageable volatility, and broad diversification.

2. JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) — Best for Income

JPMorgan • Covered Call

JEPQ applies JPMorgan's equity premium income strategy to Nasdaq-100 stocks, combining a portfolio of high-quality tech-heavy companies with options overlay to generate substantial monthly income. It offers a way to own growth-oriented technology stocks while earning income that these companies typically do not pay as dividends. The fund bridges the gap between growth investing and income generation.

JPMorgan Nasdaq Equity Premium Income ETF earns its spot as our best for income pick because it delivers on the metrics that matter most for covered call etfs investors. With an expense ratio of just 0.35%, you keep more of your returns working for you over time. The fund manages $18.0B in total assets, which speaks to its popularity and ensures strong liquidity with tight bid-ask spreads when you buy or sell shares.

Over the past five years, JEPQ has delivered a total return of 0.00%, providing steady growth for investors who stayed the course through market volatility. The fund holds 85 individual securities, giving you focused exposure to a curated selection of holdings. Its beta of 0.65 indicates that the fund is significantly less volatile than the broader market, making it a more stable choice for conservative investors.

JEPQ currently pays a dividend yield of 9.00%, providing investors with a stream of regular income on top of capital appreciation. Dividends are typically distributed quarterly and can be automatically reinvested through most major brokerages, accelerating the compounding process. With a track record stretching back to 2022, JEPQ has a relatively shorter but still notable history that investors should consider alongside its other strengths. Our Beginner Suitability Score rates it 8/10 (Great for Beginners), reflecting its excellent combination of low costs, manageable volatility, and broad diversification.

3. Global X S&P 500 Covered Call ETF (XYLD) — Best for Income

Global X • Covered Call/Income

XYLD writes covered call options on the S&P 500 index to generate monthly income for investors. Similar to QYLD but based on the broader S&P 500, it offers slightly more diversified exposure. Beginners should know that the covered call strategy caps your upside but provides consistent monthly distributions.

Global X S&P 500 Covered Call ETF earns its spot as our best for income pick because it delivers on the metrics that matter most for covered call etfs investors. With an expense ratio of just 0.60%, you keep more of your returns working for you over time. The fund manages $3.0B in total assets, which speaks to its popularity and ensures strong liquidity with tight bid-ask spreads when you buy or sell shares.

Over the past five years, XYLD has delivered a total return of 5.00%, providing steady growth for investors who stayed the course through market volatility. The fund holds 503 individual securities, giving you exceptional diversification across a wide swath of the market. Its beta of 0.50 indicates that the fund is significantly less volatile than the broader market, making it a more stable choice for conservative investors.

XYLD currently pays a dividend yield of 10.00%, providing investors with a stream of regular income on top of capital appreciation. Dividends are typically distributed quarterly and can be automatically reinvested through most major brokerages, accelerating the compounding process. With a track record stretching back to 2013, XYLD has demonstrated its ability to perform across different market environments over a meaningful period. Our Beginner Suitability Score rates it 10/10 (Great for Beginners), reflecting its excellent combination of low costs, manageable volatility, and broad diversification.

4. Global X NASDAQ 100 Covered Call ETF (QYLD) — Best for Growth

Global X • Covered Call/Income

QYLD uses a covered call strategy on the Nasdaq 100 index, writing monthly call options to generate consistent income. It sacrifices upside potential for high monthly distributions. This ETF is popular among income-focused investors but beginners should understand that total returns will lag the Nasdaq in strong bull markets.

Global X NASDAQ 100 Covered Call ETF earns its spot as our best for growth pick because it delivers on the metrics that matter most for covered call etfs investors. With an expense ratio of just 0.60%, you keep more of your returns working for you over time. The fund manages $8.0B in total assets, which speaks to its popularity and ensures strong liquidity with tight bid-ask spreads when you buy or sell shares.

Over the past five years, QYLD has delivered a total return of 5.00%, providing steady growth for investors who stayed the course through market volatility. The fund holds 103 individual securities, giving you solid diversification across a meaningful number of positions. Its beta of 0.55 indicates that the fund is significantly less volatile than the broader market, making it a more stable choice for conservative investors.

QYLD currently pays a dividend yield of 11.00%, providing investors with a stream of regular income on top of capital appreciation. Dividends are typically distributed quarterly and can be automatically reinvested through most major brokerages, accelerating the compounding process. With a track record stretching back to 2013, QYLD has demonstrated its ability to perform across different market environments over a meaningful period. Our Beginner Suitability Score rates it 9.5/10 (Great for Beginners), reflecting its excellent combination of low costs, manageable volatility, and broad diversification.

5. Amplify CWP Enhanced Dividend Income ETF (DIVO) — Best for Dividends

Amplify • Covered Call / Dividend

DIVO combines a portfolio of high-quality dividend-paying stocks with a tactical covered call writing strategy to generate enhanced income. The fund holds blue-chip stocks and selectively sells call options on individual holdings to boost cash flow. Beginners seeking above-average income with some downside protection will appreciate DIVO's blend of dividend income and option premium collection.

Amplify CWP Enhanced Dividend Income ETF earns its spot as our best for dividends pick because it delivers on the metrics that matter most for covered call etfs investors. With an expense ratio of just 0.55%, you keep more of your returns working for you over time. The fund manages $3.0B in total assets, which speaks to its popularity and ensures strong liquidity with tight bid-ask spreads when you buy or sell shares.

Over the past five years, DIVO has delivered a total return of 10.80%, outperforming many of its peers and rewarding patient, long-term investors. The fund holds 30 individual securities, giving you focused exposure to a curated selection of holdings. Its beta of 0.85 indicates that the fund is closely aligned with overall market movements, which is expected for a broadly diversified fund.

DIVO currently pays a dividend yield of 4.50%, providing investors with a stream of regular income on top of capital appreciation. Dividends are typically distributed quarterly and can be automatically reinvested through most major brokerages, accelerating the compounding process. With a track record stretching back to 2016, DIVO has demonstrated its ability to perform across different market environments over a meaningful period. Our Beginner Suitability Score rates it 8/10 (Great for Beginners), reflecting its excellent combination of low costs, manageable volatility, and broad diversification.

Comparison Table

Here is a side-by-side comparison of all 5 ETFs in our covered call etfs category. This table highlights the key metrics you should evaluate when choosing between these funds. Pay close attention to expense ratios and beginner scores, as these are the most impactful factors for long-term investment success.

*Beginner Score is calculated based on expense ratio, beta, holdings count, dividend yield, and fund inception year. Past performance does not guarantee future results.

Common Mistakes Covered Call ETFs Investors Make

Even with a solid selection of ETFs, investors in the covered call etfs category can undermine their results by falling into avoidable traps. Understanding these common pitfalls will help you stay on track and avoid costly errors that could set back your financial progress by years or even decades.

• 1

  Not understanding that covered: Not understanding that covered call strategies cap upside during strong bull markets

• 2

  Treating yield as guaranteed: Treating yield as guaranteed when options premium income varies with market conditions

• 3

  Overallocating to covered call: Overallocating to covered call ETFs at the expense of growth-oriented holdings

• 4

  Comparing covered call ETF: Comparing covered call ETF yields directly to bond yields without understanding the risk differences

The best defense against these mistakes is a simple, written investment plan that you commit to following regardless of market conditions. Define your target allocation, set up automatic contributions, and schedule a review only once or twice per year. This removes emotion from the process and keeps you focused on long-term wealth building rather than short-term noise.

Frequently Asked Questions