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Thursday's Featured News 3 Elite ETFs for Compound-Focused InvestorsAuthor: Ryan Hasson. First Published: 1/17/2026. 
Article Highlights - Option-overlay ETFs are reshaping income-focused compounding, turning market volatility into double-digit cash flow that can be reinvested for the long term.
- SPYI and QQQI offer high-yield exposure to the S&P 500 and Nasdaq 100, combining core index participation with tax-aware or aggressive income strategies.
- JEPQ provides an institutional-grade alternative, pairing active management with a 10%+ yield for investors seeking scalable, durable income in tech-heavy markets.
For investors focused on building long-term, compounded returns, the strategy has shifted in recent years. While buying a high-quality S&P 500 ETF remains a Buffett-approved approach, several new options have appeared for compound-focused investors. Investors can now capture high-yield income through option-overlay ETFs. These funds keep their usual index stock exposure but sell call options on that index to collect premium income, which is then distributed frequently. Those distributions often exceed traditional dividends, turning the volatility of the S&P 500 and the Nasdaq-100 into a relatively predictable cash-flow engine. By reinvesting those distributions, an investor can accelerate share-count growth whether the broader market is moving sideways or upward. The former CEO of Google calls it the most important thing to happen in 500, maybe 1,000 years of human society. A former U.S. Treasury Secretary says when your great-grandchildren write the history of this period, the political headlines will be the second or third story. The first story is something none of us have seen before. The dot-com collapse, global financial crisis, and COVID-19 pandemic don't compare to what's coming next. We may be entering a period of dramatic, almost unimaginable change. See the full warning and how to prepare now. Below are three popular ETFs that aim to deliver aggressive income and compounding potential. SPYI: Core Market Exposure With a Tax-Efficient Twist The NEOS S&P 500 High Income ETF (BATS: SPYI) is a relevant choice for investors seeking a balance between the stability of the S&P 500 and higher income. As of mid-January 2026, SPYI is trading near $53 with a dividend yield of 11.61%. The fund manages $7.1 billion in assets and distinguishes itself through a rules-based approach that uses SPX Index options. This strategy is notable for tax-conscious investors because index options are classified as Section 1256 contracts, which typically receive 60/40 tax treatment (60% long-term, 40% short-term). That tax treatment can make SPYI more attractive in taxable accounts compared with standard covered-call funds that may generate higher ordinary-income tax liabilities. Its top holdings closely mirror the S&P 500; mega-cap technology names like NVIDIA, Apple, Microsoft, and Alphabet account for nearly 20% of the fund. QQQI: Capturing Tech Growth and Double-Digit Yields For investors willing to lean into the technology sector's momentum and higher volatility, the NEOS Nasdaq-100 High Income ETF (NASDAQ: QQQI) offers an even more aggressive yield profile. QQQI currently posts a 13.71% yield, equating to an annual distribution of $7.44 per share. The fund sells out-of-the-money call options on the Nasdaq-100 using a data-driven, rules-based approach. That allows investors to participate in some of the tech sector's upside while collecting monthly distributions that can be reinvested to buy more shares. Yes, upside can be capped, but the income is real. Launched in 2024, QQQI has gained traction: it trades an average of 4.45 million shares daily, and over the past twelve months institutions have added more than $16 million to their positions versus about $1.48 million in outflows. JEPQ: Institutional Precision in the Nasdaq Space The JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ: JEPQ) is one of the largest and most popular income ETFs, with $33.3 billion in assets under management. It represents an institutional standard in the equity-income category, offering a 10.42% dividend yield and a net expense ratio of 0.35%. Unlike the NEOS funds, which follow a stricter rules-based option program, JEPQ uses active management and Equity-Linked Notes (ELNs) to generate income. That discretion can help portfolio managers avoid yield traps that sometimes occur during rapid market shifts. For compound-focused investors, JEPQ offers institutional scale and operational resilience, helping the income engine continue to run even in stressed market conditions. Technology names dominate the ETF's holdings, representing about 39% of the portfolio—largely driven by the oversized valuations of its top holdings, including the Magnificent Seven. Bottom Line: High Income, Real Tradeoffs Option-overlay ETFs like SPYI, QQQI, and JEPQ can be powerful tools for investors who prioritize monthly income and reinvestment-driven compounding, but they involve tradeoffs—most notably capped upside during strong rallies, distributions that vary with volatility, and distinct tax considerations. The best choice depends on your risk tolerance, tax situation, and whether you're optimizing for steady cash flow or maximum long-term total return.
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