👉 QQQI Is the New Covered Call ETF King

Happy Wednesday.

We’re excited to be sharing yet another wonderful analysis written by our friend Nicholas Bratto! If you’re like me and care about monthly income, this analysis does a wonderful job breaking down how QQQI has performed over the last 12 months in relation to its peers.

As a disclaimer, the following analysis was conducted by Nicholas and the writing is in his own words. As always, none of this should be construed as financial advice. Also keep in mind that the charts here are from when he posted this piece last week.

If you enjoy Nicholas’ writing — feel free to check out his Substack and Linktree as well!

If you want to read the original analysis posted to Seeking Alpha, click here.

⚡️ Summary:

• Crowned the 2025 Best New Active ETF, QQQI has skyrocketed to $1.5B in AUM since its January 2024 inception with a 16.5% annualized return, dominating 300+ new ETFs on the market.

• QQQI has outperformed QYLD and JEPQ in total return, price return, and TTM yield while offering better tax efficiency.

• QQQI closely tracked it's underlying benchmark, QQQ, through the 2024 bull run and 2025 correction — showcasing the ability to extract monthly income from the index while participating in the upside appreciation.

⚡️ Best New Active ETF of 2025:

Last year I published the first coverage of the NEOS Nasdaq-100 High Income ETF on Seeking Alpha and man, what a ride this fund has had since then! At the time the fund had only existed for a few months with $76M AUM. Today, QQQI has amassed almost $1.5B AUM and I think things are just getting started.

Having just received the Best New Active ETF of 2025 award from etf.com, QQQI has positioned itself early as not only a leading covered call ETF, but an excellent actively managed ETF as well. Keep in mind the award doesn't look at just one sector or just one strategy — 2025 set a record with 300+ new ETFs, with 80% of those being actively managed. And QQQI beat out them all!

This is a high honor. Of note, active ETFs now outnumber passive ETFs, a significant shift from 2019 when passive ETFs outnumbered active five to one.

I was generally optimistic in my outlook of QQQI, especially given the NEOS S&P 500 High Income ETF (SPYI) performance, but because the fund was so new and the NASDAQ more volatile, I wanted to monitor its performance before personally taking a position.

I believe QQQI has demonstrated dominance in the covered call option ETF space while offering a tax-efficient, high income hedge to keep pace with the underlying index.

⚡️ QQQI Performance:

Since inception 1/31/2024, QQQI has delivered a 21.8% total return or a 16.5% annualized total return as of 5/15/2025. Additionally, the fund put up 1.9% in price appreciation, which before the correction this year was just over 8.0%.

One of the metrics I monitor with these types of funds is the NAV and price appreciation as it has a direct impact on payouts, inflation protection, and ultimately total return. QQQI has checked the box here, contingent on a quick recovery back to a 3%+ price return, while providing an impressive 14.4% trailing twelve month yield.

A $10,000 investment in QQQI would produce about $120/month of income.

⚡️ Options ETF Space — QQQI vs QYLD vs JEPQ:

QQQI is not the only popular Nasdaq-100 based options ETF.

JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) and Global X NASDAQ 100 Covered Call ETF (QYLD) are two of the most popular in the space with $25.2B and $8.3B in assets under management, respectively.

QYLD is unofficially the “father of retail covered call ETFs” and I personally owe homage to it for being a big influence on my investment strategy and education. However, I no longer own QYLD and I have never owned JEPQ. At this point, I don't see why any investor would own either based on QQQIs performance (as shown below).

QQQI has outperformed both funds significantly, particularly QYLD, while showing higher price appreciation as well.

Specifically, if you look at the recent run-up, QQQI was able to capture more upside, leading me to believe long-term, this fund will continue to outperform JEPQ and QYLD. JEPQ is close, and yes uses a different hedging strategy, but that difference comes with not only performance losses, but tax inefficiency as well.

QQQI, while outperforming both of these funds, is also significantly more tax efficient, making that performance gap even wider when you calculate the net real returns for your individual tax situation.

QQQI, like all the NEOS High Income ETFs, uses multiple methods to create tax-efficiency:

• Qualified dividend income of the underlying holdings.

• Use of index options which are taxed 60% long-term/40% short-term capital gains.

• Tax-loss harvesting which helps classify > 90% of the distributions as Return of Capital (ROC) which are essentially deferred long-term capital gains once your cost basis goes to zero.

QYLDs distributions are mostly classified as ROC as well, but has significantly lagged QQQI. While JEPQ has kept pace with QQQIs performance, JEPQs distributions are primarily taxed as ordinary income vs. QQQI distributions primarily being classified as ROC.

⚡️ QQQI vs QQQ:

On top of NAV concerns, one of the critiques of funds like QQQI are the divergence of returns from the underlying index they track. Surprisingly, QQQI has actually kept up with QQQs performance since inception, even outperforming it just last week as shown below.

To be fair, the timeline is still short for QQQI, but the combination of the 2024 bull run and 2025 correction highlights the funds ability to capture upside growth of the underlying holdings and hedge the downside by producing high levels of tax efficient, monthly income.

What I've really liked seeing is the fund not being left behind after a downturn, common amongst options ETFs, which I believe is demonstrating NAV erosion control long-term.

⚡️2025 and Beyond:

It's still too early to tell, but I am continuing to monitor the NAV and payouts of QQQI and NEOS funds in general to manage inflation risk.

I'm still hedging this risk by reinvesting my distributions and would continue to reinvest a portion until I need to live off the income until we see these funds develop even more.

I've since initiated a position in QQQI as part of my business income strategy. Essentially, I invest all my small business profits into the core NEOS funds to stabilize my income and create my own salary long-term. I've rebalanced my business brokerage account equally into SPYI, QQQI, NEOS Russell 2000 High Income ETF (IWMI), NEOS Bitcoin High Income ETF (BTCI), and NEOS Real Estate High Income ETF (IYRI).

This is in addition to my personal taxable brokerage account portfolio, which is mostly dividend growth stocks and a few highly speculative growth plays I initiated once I hit my $100,000 dividend growth investment goal.

My ultimate goal is to offset all my fixed expenses: subscriptions, cellphone, water, internet, energy, insurances, fuel, property taxes, and grocery bills with dividend income to have financially security and I think QQQI will serve as a tool to cover part of my expenses moving forward.

Don’t follow us on social yet? Follow us on Instagram, TikTok, and Twitter.

The author, publisher or insiders of the publisher may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.

Grit is a publisher of financial information, not an investment advisor. Grit does not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient. Grit does not guarantee the accuracy or completeness of the information provided in this page. All statements and expressions herein are the sole opinion of the author or paid advertiser.

THE INFORMATION CONTAINED ON THIS WEBSITE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN. INVESTORS SHOULD OBTAIN INDIVIDUAL INVESTMENT ADVICE BASED ON THEIR OWN CIRCUMSTANCES BEFORE MAKING AN INVESTMENT DECISION

No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned.

Cover image source: AndreyPopov/iStock via Getty Images

The author, publisher or insiders of the publisher may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.

Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable. They are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur. Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein. The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and Grit undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material.

Grit does not accept any liability whatsoever for any direct or consequential loss, however arising, directly or indirectly, from any use of the information contained herein.

By using the Site or any related social media account, you are indicating your consent and agreement to this disclaimer and our terms of use. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.

Please read: Terms of Use, Privacy Policy, Disclosure Policy and Disclaimer Policy

If you have any questions please contact us at [email protected]