The world of high-yield, option-strategy ETFs continues to expand. Nasdaq recently released updated data, showing the growth in assets. We launched our ETF Income Edge newsletter service in February 2024 and have been busy keeping up with fund launches, new strategies, and comparing returns.

When we were preparing to launch ETF Income Edge, I had read that these types of ETFs had gathered more than $70 billion in assets. That’s an impressive number, especially because the majority of option income strategy ETFs had launched within the last couple of years.

According to the Nasdaq.com article, before 2020, the category had less than $5 billion in assets. Here is the chart showing current assets.

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Yes, the chart shows $180 billion for all types of option overlay ETFs, and $100 billion for enhanced income ETFs. Our newsletter focuses on the enhanced income funds.

The two JPMorgan funds, the JPMorgan Equity Premium Income ETF (JEPI) and the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ), are by far the largest, with approximately $65 billion in assets. JEPI launched in 2020, and JEPQ in 2022. 

This chart displays the top issuers of overlay ETFs, along with the number of funds each issuer has. The black dot is the fund count.

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Although this article was published last month, the data is already quite outdated. For example, Roundhill Investments has been busy launching new funds and now has a dozen in this category.

The funds in this category yield returns from the high single digits to yields of 30%, 40%, and even higher. Investors should not just look at the yields. You need to understand the options strategies used and how that looks in the portfolios. There are numerous ETFs with SPY and QQQ as their underlying assets, and a significant variation in yields and returns exists.

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