Many of these funds use covered-call strategies to boost income. In simple terms, they own a portfolio of securities and sell call options against those holdings, collecting option premiums that are distributed to shareholders. The approach can produce attractive yields, although it also limits part of the upside during strong market rallies.
According to TipRanks’ High Dividend Yield ETFs tool, three ETFs currently stand out with dividend yields at or above 10%: iShares 20+ Year Treasury Bond BuyWrite Strategy ETF (TLTW), Global X Nasdaq 100 Covered Call ETF (QYLD), and J.P. Morgan Nasdaq Equity Premium Income ETF (JEPQ).
Here’s what investors should know about each one.
iShares 20+ Year Treasury Bond BuyWrite Strategy ETF (TLTW)
Unlike most high-income ETFs, TLTW doesn’t own stocks. Instead, it invests in the iShares 20+ Year Treasury Bond ETF (TLT), giving shareholders exposure to long-term U.S. Treasury bonds while selling covered call options against that position to generate additional monthly income.
