SPYI, QQQI, and ISPY structure distributions to minimize tax drag compared to peers like JEPI and JEPQ.
Three covered-call ETFs—SPYI, QQQI, and ISPY—deliver yields around 12% while shielding most distributions from ordinary income tax rates. SPYI and QQQI leverage Section 1256 index options, taxing 60% of gains as long-term and 40% as short-term, regardless of holding period.
Unlike peers such as JEPI and JEPQ, which distribute ordinary income from equity-linked notes, these funds reduce tax drag for investors. ISPY trades yield for equity upside, offering 17% total returns at a lower 4.6% yield but greater S&P 500 participation.
The tax treatment under Section 1256 provides a structural advantage, making these ETFs attractive for taxable accounts seeking high income with reduced liability.