Top 5 Covered Call Funds Paying Over 10% Yield Right Now
If you're looking to earn some steady income from your investments, covered call funds could be something to watch. Only once in a while do we see several of these funds paying over a 10% yield at the same time, and right now is one of those times.
Covered call funds work by holding a group of stocks and then selling call options on them. The income from these options, along with stock dividends, is passed on to investors. While the strategy may limit upside during a big market jump, it's great for adding income – especially if the market is steady or moving slowly.
Here are five covered call funds currently paying over a 10% yield:
**1. JEPI – JPMorgan Equity Premium Income ETF**
JEPI is one of the more popular options out there. While it’s more of a partial covered call strategy, it still delivers attractive monthly income. The yield lately has hovered around 10%, give or take. Plus, it’s backed by JPMorgan, which gives some people a sense of security.
**2. QYLD – compare dividend stocks -100 Covered Call ETF**
QYLD is well-known for its very high yield – often above 11%. It focuses on the Nasdaq-100, known for big tech names like Apple and Microsoft. While it's great for income, it tends to underperform in fast-rising markets.
**3. RYLD – Global X Russell 2000 Covered Call ETF**
Like QYLD, but focused on smaller U.S. companies in the Russell 2000 Index. It’s yielding over 12% right now. Just keep in mind – small-cap stocks can be more volatile, so price swings happen more often.
**4. XYLD – Global X S&P 500 Covered Call ETF**
XYLD uses the S&P 500, which includes large, well-known companies. It mixes decent market exposure with solid income and generally hovers around the 11% mark for yield.
**5. DIAX – Nuveen Dow 30 Dynamic Overwrite Fund**
This one focuses on the Dow Jones Industrial Average. While it’s a bit more old-school, it can pay well. Yields have sometimes been in the 10%–11% range, and the fund has analysts actively managing the options strategy.
Covered call funds can be a good tool for income-focused investors. Just remember: high yield doesn't always mean low risk. Prices can still go down, especially if the market shifts quickly. But with some research and patience, they can be part of a steady-income approach.