The largest option-income fund beat the S&P 500 by selling calls on a quarter of its assets

The largest fund in etf.net's Active Option Income category beat State Street SPDR S&P 500 ETF SPY over the year through Oct. 29, 2026. The calls it sold covered a quarter of the fund as of Sept. 30.

The median fund's total return was 9.1%. SPY's was 13.1%, a gap of 4 percentage points.

The median fund charges 0.95% a year, against 0.09% for SPY, so the extra charge is less than one percentage point of that gap. Fees are not why the median fund lagged. The 50 funds hold $12.6 billion, and the ones that hold most of it did not make the same trade.

Selling a call means taking cash now and giving up gains above a price the contract names. How much of a rally a fund gives up depends on how much of the fund those contracts cover.

The year finished higher, and not in a straight line. The S&P 500 dropped almost 5% from an early-June peak, then closed at a record on Aug. 4, CNN reported.

The largest option-income funds

Three funds hold 61% of the category. They did not have the same year.

First Trust FT Vest Rising Dividend Achievers Target Income ETF RDVI is the largest, with $3.8 billion on Oct. 29. Its total return was 18.9%, ahead of SPY. The cash it paid over the past year came to 8.2% of its Oct. 29 share price.

It owns stocks in the Nasdaq US Rising Dividend Achievers Index and sells calls on the S&P 500, not on those stocks. As of Sept. 30 the calls covered 25% of the fund's net assets, First Trust said.

That is why a loss in one quarter can sit under a fund that beat the market. On the same page, First Trust's comparison runs through Sept. 30, a month before the Oct. 29 returns.

Over the year ending that day, the fund's net asset value returned 17.1% and the dividend-stock index returned 18.0%, a gap of 0.9 percentage points. The S&P 500 returned 15.7%.

In the quarter ending that day, the fund's net asset value lost 3.3% and the index lost 3.2%, while the S&P 500 rose 2.3%. The calls, written on the S&P 500 and covering a quarter of the fund, did not pull it off its stocks. The year through Sept. 30 was the stocks' year.

Aptus Collared Investment Opportunity ETF ACIO, the second largest, had $2.4 billion on Oct. 29. It sells calls on stocks it owns and buys puts on a market index, options that pay the fund if that index falls. Aptus calls the combination a collar, and names limiting the downside as a goal alongside income.

Its total return was 6.3%, behind SPY. The cash it paid over the past four quarters came to 0.4% of its Oct. 29 share price. The prospectus says a portion of the cash from the calls is spent buying the puts, so that portion never arrives as a payout.

Main Management's Main BuyWrite ETF BUYW held $1.5 billion. It owns other exchange-traded funds and, its prospectus says, may sell calls on anywhere from none to all of them.

Its total return was 8.7%, near the category median and behind SPY. The cash it paid over the past year came to 5.9% of its Oct. 29 share price.

YieldMax's 60.5% rate was one weekly payment

YieldMax Ultra Option Income Strategy ETF ULTY is one of the 50 funds.

YieldMax put its distribution rate at 60.5% on Oct. 27. That rate is the new weekly payment, $0.265, annualized and divided by the fund's net asset value. It is not a stack of the past year's payments, and YieldMax says it is not a total return.

The $0.265 is already the cut, 69% below the weekly payment of a year earlier. YieldMax said that payment was 100% estimated return of capital, and none of it income.

Through Oct. 29 the fund's total return was -11%.

YieldMax Universe Fund of Option Income ETFs YMAX, also in the category, holds other YieldMax funds. It cut its weekly payment 71%, to $0.055. Its total return was -5.2%.