Today, there’s no denying that the NASDAQ-100 has been a potent vehicle for capital appreciation. For example, the Invesco NASDAQ 100 ETF (NASDAQ: QQQM) has returned 15.39% annualized over the past five years, propelled largely by the “Magnificent Seven” stocks and the index’s heavy large-cap growth tilt.
Still though, income-focused investors have historically shied away from plain-vanilla NASDAQ exposure because the yield simply is not going to turn heads. QQQM currently pays a 0.44% 30-day SEC yield. Personally, I like that because it is relatively tax efficient in a brokerage account. But again, if your goal is distributions and monthly cash flow, QQQM is probably not going to cut it.
Fortunately, there are now a variety of alternative ETFs that use derivatives or structured products to deliver NASDAQ-100-based exposure with much higher income. Importantly though, these are not dividend-focused strategies. Most of them are effectively selling future upside and/or volatility in exchange for higher current payouts. You also need to contend with taxes, so there is no free lunch here either.
Still though, there are three that I think are worth looking at: one from JP Morgan, one from NEOS Investments, and one from Calamos Investments. Here’s my quick SparkNotes breakdown of each.
The JP Morgan Version
The JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) has become extremely popular with more than $38 billion in assets under management. JEPQ charges a fairly reasonable 0.35% expense ratio given that investors are effectively getting both active stock selection and a derivatives overlay. The strategy works in two parts.
At its core, JEPQ holds an actively managed portfolio of stocks selected primarily from the NASDAQ-100, although the managers do have discretion to venture outside the benchmark. The goal is to deliver performance broadly similar to the NASDAQ-100, but with a somewhat smoother ride and lower overall volatility.
On top of that sits an allocation of up to 15% in equity-linked notes, or ELNs. These are structured products that embed the payoff profile of a one-month out-of-the-money covered call strategy on the NASDAQ-100 index. That call-writing component caps some upside, but it also generates substantial income, particularly during periods of elevated volatility.
Right now, JEPQ is paying a hefty 12.7% 30-day SEC yield. However, investors should understand that distributions generated from ELNs are often taxed as ordinary income, which can reduce after-tax returns significantly in taxable accounts.
The Calamos Option
Competing against JEPQ is the Calamos Nasdaq Autocallable Income ETF (NASDAQ: CAIQ). This ETF is much newer, launching in November 2025, and currently sits at roughly $188 million in assets under management and charges a 0.74% expense ratio.
Unlike JEPQ, CAIQ does not actually hold stocks directly. Instead, the ETF primarily holds collateral, which is then used to enter into a total return swap agreement with JP Morgan tied to the MERQUBE Nasdaq-100 Vol Advantage Auto-Call Index. This benchmark represents a laddered portfolio of 52 autocallable notes.
Autocallables are structured products that pay high coupons as long as the underlying benchmark remains above certain barriers. At scheduled observation dates, if the index is above a specified level, the note gets “called” early and investors receive their principal back. If markets decline too far below the downside barrier, coupon payments can stop and investors may face principal losses.
The ladder structure helps smooth this out by staggering maturities across many notes rather than concentrating risk in a single issuance. According to Calamos data as of May 15, 100% of the underlying autocallables are currently paying coupons, with none of them near maturity having principal at risk. The weighted average maturity sits at 4.4 years.
The income profile here is substantial. Based on the most recent monthly payout annualized against net asset value, CAIQ currently sports a 17.32% distribution rate. Importantly, it is also more tax efficient than JEPQ because a large portion of distributions are currently classified as return of capital.
The NEOS Investments Alternative
Finally, we have the NEOS Nasdaq 100 High Income ETF (NASDAQ: QQQI), which is somewhat simpler than both JEPQ and CAIQ and sits in the middle in terms of fees with a 0.68% expense ratio.
At its core, QQQI owns the NASDAQ-100 and its constituent stocks directly. On top of that, the ETF systematically sells NASDAQ-100 index call options to generate additional income. One important distinction is that these options are Section 1256 contracts, which receive favorable blended 60/40 tax treatment under U.S. tax law.
NEOS also actively engages in tax-loss harvesting inside the portfolio, which can further help classify a larger share of distributions as return of capital. QQQI currently pays a very sizable 14.11% distribution rate with a monthly cadence..
Compared to JEPQ, the strategy is somewhat more transparent and easier to understand structurally. Compared to CAIQ, it is far less dependent on structured product mechanics and swap counterparties. Still though, just like every other high-yield NASDAQ strategy, the tradeoff remains the same: higher current income in exchange for sacrificing some upside participation.
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