FEPI ETF

FEPI offers a unique strategy by holding 15 tech stocks and selling options against them, providing high income but capping upside and increasing concentration risk. Despite trailing competitors, FEPI impresses with a 25% yield and tax-efficient distributions, making it suitable for aggressive income investors seeking innovation at a discount. I recommend a buy rating for FEPI, advising up to a 10% portfolio allocation for aggressive investors, but caution against its volatility and concentration risks.

Covered Call ETFs like QYLD, FEPI, QQQI, and QDTE offer high yields by selling call options on Nasdaq 100 stocks, appealing to income-focused investors. FEPI, launched in October 2023, owns shares of top tech stocks and yields about 25%, outperforming QYLD in recent bull markets. QQQI, launched in January 2024, offers a 14% yield with a tax-efficient income stream, while QDTE, launched in March 2024, provides weekly distributions with a 31% yield.

The FEPI ETF generates high monthly income by selling covered calls on FANG stocks, achieving 25% annualized income over the past 11 months since its inception. The underlying stocks' high valuations and slowing growth rates expose FEPI to significant capital loss risks, potentially overwhelming its income returns. Fed easing may provide some short-term support to these speculatively sensitive tech stocks, but previous Fed-fuelled market advances have started from much cheaper valuations.

FEPI invests in the top 15 large-cap tech stocks and sells covered calls to generate income, capping growth and exposing investors to downside risk. REX FANG & Innovation Equity Premium Income ETF offers a high distribution rate of 25.20%, but declining distributions and limited upside potential are concerns. Despite a relatively moderate expense ratio, the strategy's limited growth and downside risks make it less appealing for long-term investors.

Cornerstone funds CLM and CRF offer monthly high-yield distributions with potential for capital appreciation from top S&P 500 stocks. Rex FANG & Innovation Equity Premium Income ETF offers even higher yield, also paid monthly, with a covered call strategy on 15 big tech stocks. FEPI provides high-yield income with some potential price gains from growth in underlying holdings, suitable for income investors.

We've seen more choppiness in the markets in the last couple of weeks. That once again highlights why we should—dare I say need to—own one of the lowest-volatility, highest-paying investments I know of.

AI-Powered Passive Income Snowball: FEPI And 2 Other Big Yields

REX FANG & Innovation Equity Premium Income ETF (FEPI) offers concentrated exposure to FANG stocks and other top technology companies. The fund combines big tech stock exposure with the potential for enhanced income through a covered call strategy. While FEPI's yield is high, it has grossly underperformed on total returns because its portfolio is only exposed to the stock's downside while trading away its upside.

REX FANG & Innovation Equity Premium Income ETF offers a high dividend yield of around 25% and monthly distributions, making it appealing for income-focused investors. FEPI uses a strategy of writing covered calls on its holdings in the tech sector to generate income and provide capital appreciation. The fund has outperformed peer covered call ETFs, such as QYLD, due to the fact that options are written out of the money.