JEPI vs QYLD vs RYLD: Which Covered Call ETF Should You Buy
If you're looking to earn regular income from your investments, you might have come across covered call ETFs like JEPI, QYLD, and RYLD. They’ve become popular with investors who want to boost the cash flow from their portfolios. But which one should you go for? Let’s break down the differences in a simple, easy-to-follow way. (You can also find more ETF comparisons and tips at dividendstacker.com.)
First, let’s talk about what a covered call ETF does. In short, these funds buy a group of stocks and then sell call options on them. Selling call options brings in extra income. This method can produce steady payouts each month, though it may hold back growth in rising markets.
Starting with QYLD — this one sells call options on the Nasdaq-100. That means you’re getting some high-growth tech names, and the income can be pretty high. However, since QYLD sells options on 100% of its portfolio, there's not much room for capital growth. Its yield is attractive, but the share price tends to stay flat or slightly slide over time.
RYLD works the same way but focuses on the Russell 2000, which includes smaller U.S. companies. It can offer strong income, much like QYLD, but small-cap stocks tend to be more volatile. This means RYLD might be a bit bouncier in price from one month to the next.
high yield covered call etf dividend calculator is a little different. It sells options too, but in a slightly lower-risk way and doesn't write calls on its whole portfolio. The fund also holds more stable, blue-chip stocks—think large companies that are less likely to swing wildly in price. As a result, JEPI usually offers a mix of solid income and some growth potential over time. Its yield might be lower than QYLD or RYLD, but the share price often holds up better.
So, which ETF makes sense for you? If you want the highest possible income and can handle less growth and more price ups and downs, QYLD or RYLD could work. If you’d prefer a better balance between income and long-term stability, JEPI might be the better bet.
Each has its benefits and trade-offs. The best one for you depends on your goals—whether that’s steady monthly income, long-term growth, or a mix of both.