Covered call ETFs are the biggest thing to happen to income investing in a decade. The pitch is simple: hold stocks, sell call options against them, pass the premium through as a monthly check. The yields on the label run anywhere from 5% to 30%, and that spread alone should tell you these funds are not interchangeable.
The number everyone quotes is the distribution yield. The number that actually matters is what happens to your capital while you collect it. A fund can pay you 12% a year while its share price bleeds away half of it. Another can pay 8% and grow on top. So we scored every fund with a ZTRADEZ Rating: a 1 to 10 grade weighing what it pays (heaviest weight), how it recovered from the 2025 crash, how hard it fell in that crash, and whether its NAV holds up over time. The table is ranked by that rating, best first.
The Full Rankings
| Ticker | ZTRADEZ Rating | Yield | Max Down | Since Inception | Launched |
|---|
| $BALI | 9 | 8.5% | -16.1% | +36.4% | 2023 |
| $GPIQ | 8.5 | 9.8% | -25.1% | +44% | Oct 2023 |
| $IWMI | 7.4 | 15% | -19.7% | +5.3% | 2024 |
| $SPYI | 7.3 | 12.2% | -17.3% | +6.7% | Aug 2022 |
| $ISPY | 7.2 | 11% | -22.1% | +18.5% | Dec 2023 |
| $KNG | 7.2 | 8% | -4.3% | +17% | Mar 2018 |
| $QQQI | 7.1 | 14.25% | -24.4% | +8% | Jan 2024 |
| $TSPY | 7.1 | 14.56% | -18.4% | +3.7% | 2024 |
| $GPIX | 7.0 | 8.1% | -21.2% | +40% | Oct 2023 |
| $DIVO | 7.0 | 4.8% | -11.1% | +34% | Dec 2016 |
| $JEPI | 7.0 | 8.2% | -12.2% | +13.1% | May 2020 |
| $JEPQ | 6.8 | 11.5% | -25.2% | +16.7% | May 2022 |
| $XYLG | 6.5 | 12% | -28.1% | +16.2% | Sep 2020 |
| $QYLG | 6.4 | 10% | -27.9% | +9.2% | Sep 2020 |
| $XYLD | 3 | 13.1% | -15.5% | -17% | Jun 2013 |
| $QYLD | 2.2 | 11.7% | -19.1% | -28.7% | Dec 2013 |
| $RDTE | 1.8 | 30% | -26.0% | -32% | Mar 2024 |
| $XDTE | 1 | 20% | -20.4% | -26% | Mar 2024 |
| $QDTE | 1 | 27% | -25.0% | -36.2% | Mar 2024 |
| $RYLD | 1 | 12% | -17.0% | -35.4% | Apr 2019 |
1 AVOID5 CAUTION10 ELITE
How the ZTRADEZ Rating works: a 1 to 10 score built from four factors. Distribution yield (35%), how much monthly cash flow the fund pays, the reason anyone buys these. Recovery (25%), how it climbed back from the 2025 crash bottom and whether it reclaimed its pre-crash high. Crash drawdown (25%), how hard it fell peak to bottom, where a smaller drop scores higher. Growth since inception (15%), where the share price sits today versus its launch price, the cleanest test of whether the payout erodes your capital over time. Yield leads the weighting because income is the entire point of this category, but the crash factors together carry 50% because a payout you collect while your capital burns is not income.
All figures approximate as of July 18, 2026. Rows ordered by ZTRADEZ Rating, best first. Crash drawdown is peak to bottom during the 2025 selloff; Bottom to Now is the move off that low. Distribution yields reset monthly. Verify current numbers on the issuer page before acting on anything here.
Factor Breakdown
Same funds, split into the four ingredients of the rating. Each bar runs 0 to 10 with the white tip marking the score. Stability is how well it held up in the 2025 crash, Yield is the payout, Recovery is the climb back off the crash bottom, Growth is where the share price sits today versus its launch price.
Ticker
Stability
Yield
Recovery
Growth
Bars scale 0 to 10 · white tip = score · tick marks at 2.5 / 5 / 7.5 · based on 2025 crash data and issuer figures as of Jul 18, 2026
How to Read This Table
Three patterns jump out of the crash data:
- The crash told the truth. KNG fell just 4.3% and DIVO 11.1% while the Nasdaq income funds dropped 25%. Downside behavior is the single biggest difference between these products, which is why the two crash factors together carry half the rating.
- The comeback kings earned their spots. GPIQ ripped +57.2% off its bottom to a new high. IWMI, QQQI, ISPY, GPIX, and JEPQ all reclaimed their pre-crash peaks within months. Falling hard is forgivable if you come all the way back while still paying the distribution.
- The 0DTE trio never recovered. XDTE, QDTE, and RDTE are all LOWER today than they were at the crash bottom, while paying 20% to 30% distributions the whole way down. That is the clearest picture you will ever get of a payout funded by NAV, and it is why all three score 1 to 2 regardless of what the yield math alone would say. A fund that cannot bounce off its own crash bottom in a recovering market fails the category's one job.
The Tax Angle: These Are NOT Taxed the Same
Same category, very different tax bills. This is the part most yield comparisons skip entirely:
- The NEOS funds (SPYI, QQQI, IWMI) are built for taxable accounts. They sell index options, which are Section 1256 contracts taxed 60% long-term / 40% short-term no matter how briefly they are held, and they actively tax-loss harvest. Historically a large share of their distributions has been classified return of capital, which defers the tax until you sell and lowers your cost basis instead of hitting you as income each month.
- JEPI and JEPQ are the least tax-friendly per dollar. Their income comes through equity-linked notes, and those distributions are generally taxed as ordinary income at your full marginal rate. Great funds for an IRA or 401k, where the tax treatment stops mattering. In a taxable account, a 8% JEPI payout can net you less after tax than a lower payout from a more efficient structure.
- DIVO and KNG lean on qualified dividends. A meaningful chunk of their payout comes from actual dividends of the underlying stocks, which qualify for the lower long-term rates. Combined with their small drawdowns, that is part of why conservative income investors keep choosing them despite the modest headline yields.
- The Global X funds (QYLD, XYLD, RYLD) are a mix of return of capital and ordinary income that shifts year to year. Check the 19a notices, do not assume.
- The Roundhill 0DTE funds pay heavily as return of capital, partly by design and partly because, as the table shows, some of that payout literally is your capital coming back.
One rule of thumb ties it together: ordinary-income payers (JEPI, JEPQ) belong in retirement accounts, Section 1256 and qualified-dividend payers (NEOS funds, DIVO, KNG) are the better taxable-account choices. And return of capital is a deferral, not a gift: it lowers your basis, and the tax bill shows up when you sell.
The Fine Print That Matters
Recovery is the single most important factor. The yield does not matter if the fund drops and can never climb back. A fund paying 12% while its share price sinks year after year is not income, it is your own money handed back to you on a schedule, and you would be better off in cash in your bank. The funds at the top of this table earned their spot by falling in the 2025 crash and then reclaiming their highs while still paying. The funds at the bottom fell and never came back.
Distribution yield is not total return. Every fund on this list can pay its stated distribution while losing you money overall. Use the yield column for cash flow planning only, and judge the fund by what your capital did while you collected it.
Targets are not earnings. The Roundhill 0DTE payouts are engineered targets. When option premium falls short, the difference comes out of NAV, which means part of your monthly check can be your own capital coming back.
Short track records everywhere. Most of this list launched after 2022 and has never traded through a full bear market. QYLD and XYLD are the only ones with 2013-era scars, and their price charts are the honest preview of what a decade of aggressive call selling does in exchange for the income.
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Not investment advice and not tax advice. Tax treatment descriptions are general, based on how these funds have historically classified distributions; classifications change yearly and your situation is your own, consult a tax professional. The ZTRADEZ Rating is our own opinion score based on the four stated factors and publicly available price data; it is not a recommendation to buy or sell any security. ZTRADEZ, LLC is not affiliated with JPMorgan, Goldman Sachs, NEOS, Global X, Amplify, FT Cboe Vest, ProShares, Roundhill, Tappan Street, or BlackRock. Distribution rates are not a measure of total return. Distributions may include return of capital and are not guaranteed. Figures are approximate as of July 18, 2026 and change monthly. Past performance does not guarantee future results. Do your own due diligence and read each fund's prospectus before investing.
