These 3 ETFs Yield More Than 10% Without Betting Everything on Covered Calls

The conventional wisdom around covered call ETFs is fairly straightforward. They tend to underperform during strong bull markets because some of their upside has been sold away, potentially outperform during sideways markets, and provide a modest cushion during bear markets because those premiums offset some losses.

Now consider which of those environments has historically dominated most investors’ experience: bull markets. That’s the main problem I have with building an income portfolio entirely around covered calls. Your biggest long-term risk may be earning a total return that isn’t competitive enough to keep pace with your future spending needs, particularly after inflation. Giving up equity upside year after year can become expensive when stocks continue compounding higher.

That said, I know plenty of investors are enamored with income. My preference is to approach income the same way I approach the rest of portfolio construction: diversify. That means diversifying across asset classes, sectors, company sizes, and countries, but also across the risk premiums you’re accepting to generate that income.

With covered calls, you’re effectively being paid to sell some future upside. There are other ways to generate double-digit yields. You can sell downside protection to other investors, accept substantial credit risk, or lend money to private companies. Each carries a very different set of risks, which is exactly why combining different sources of income can make more sense than relying entirely on one options strategy. Here are three ETFs currently yielding more than 10% that take those alternative approaches.

WisdomTree Equity Premium Income Fund (WTPI)

Think of selling a cash-secured put as the other side of the options-income equation. Suppose a stock trades at $100 and you’d be willing to buy 100 shares at $95. You could sell a $95 put and keep enough cash available to purchase those shares if you’re assigned. In exchange for taking that obligation, the buyer pays you an option premium.

If the stock stays above $95 through expiration, the put expires worthless and you keep the premium. If the stock falls below the strike, you can be assigned and required to purchase 100 shares at $95 each, regardless of how far the market price has subsequently fallen. That’s where the risk comes from. Selling puts can produce a steady stream of attractive premiums until a sufficiently large decline leaves you buying into substantial losses. The strategy exchanges exposure to downside risk for current income.

You can implement this yourself, but the WisdomTree Equity Premium Income Fund (WTPI) packages the process into an ETF. It tracks the Volos U.S. Large Cap Target 2.5% PutWrite Index, which systematically sells slightly out-of-the-money S&P 500 put options, targeting strikes approximately 2.5% below the index, and periodically rolls the positions.

After deducting its 0.44% net expense ratio, WTPI had a 12.09% distribution yield as of Aug. 31. That figure annualizes the ETF’s most recent monthly distribution relative to its net asset value, so investors shouldn’t assume they’ll necessarily receive 12.09% over the coming year.

BondBloxx CCC Rated USD High Yield Corporate Bond ETF (XCCC)

Options aren’t the only place investors can find double-digit yields. The bond market will also pay you considerably more if you’re willing to lend to companies with questionable creditworthiness. Investment-grade corporate bonds are generally rated BBB or higher. Go below that threshold and you enter non-investment-grade territory, commonly called high-yield or junk bonds. Near the bottom of that spectrum are CCC-rated issuers.

According to S&P Global data, CCC-rated corporate debt has historically experienced a 45.67% cumulative default rate over three years.  For investors comfortable accepting that level of credit risk, the BondBloxx CCC Rated USD High Yield Corporate Bond ETF (XCCC) provides diversified access to this corner of the bond market.

After deducting its 0.40% expense ratio, XCCC offered an 11.94% 30-day SEC yield as of Sept. 1, 2026. Unlike a distribution rate based on annualizing the latest payout, the SEC yield provides a standardized estimate based on the portfolio’s recent net investment income. Diversification helps somewhat. XCCC limits exposure to individual bond issuers to approximately 2%, reducing the damage that any single corporate default can inflict on the portfolio.

But diversification can’t eliminate systemic credit risk. If the economy deteriorates, defaults increase and credit spreads widen, CCC bonds can suffer substantial losses across the board. High-yield bonds can behave much more like equities than high-quality fixed income during periods of severe market stress. The nearly 12% yield is compensation for taking that risk. Buyer beware!

VanEck BDC Income ETF (BIZD)

You don’t necessarily need to be an accredited investor or allocate money to a private fund to gain exposure to private credit. Main Street investors have long had another route through business development companies (BDCs). BDCs are publicly traded investment companies that generally lend to or invest in private middle-market businesses. These companies are often too small to efficiently access traditional public bond markets, so BDCs step in to provide financing, frequently through floating-rate senior secured loans.

Their pass-through structure also makes them natural income vehicles. BDCs generally distribute most of their taxable income to shareholders, which can result in very high yields. Analyzing individual BDCs can be complicated, however. Investors need to consider credit quality, non-accrual rates, leverage, net asset value, portfolio marks, underwriting standards, and whether shares trade at a premium or discount to NAV. The VanEck BDC Income ETF (BIZD) simplifies the process by providing a market-cap-weighted portfolio of publicly traded BDCs.

BIZD currently offers an 11.42% trailing 12-month distribution yield. It pays quarterly, and those distributions can fluctuate as the underlying BDCs adjust their own payouts. There’s also an unusual fee issue investors should understand. BIZD reports a 9.69% total expense ratio, which looks extraordinarily expensive at first glance. But 9.27% consist of acquired fund fees and expenses generated by the underlying BDC holdings. VanEck itself charges a 0.40% management fee, with another 0.02% attributable to other expenses.

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