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The income investing world is full of beautiful lies.
The most seductive one? "Higher yield equals better returns."
Here's reality: Most high-yield options ETFs are quietly liquidating your portfolio while disguising it as "income." You're getting taxed on your own capital being returned to you.
After analyzing the US options-based ETF landscape, I've found 12 funds that break this pattern: Zero NAV erosion while generating real income.
These aren't yield traps. These are wealth-building engines.
The Numbers That Expose The Trap
Two investors. Same $10,000 starting capital. Five years later, wildly different outcomes.
Investor A: Chasing The 45% Yield
45% annual yield
NAV dropping 12% per year
Result after 5 years: $5,300 in capital (down 47%)
Annual income now: $2,385 (also down 47%)
Investor B: The 22% "Boring" Yield
22% annual yield
NAV growing 4% per year
Result after 5 years: $12,167 in capital (up 22%)
Annual income now: $2,677 (up 22%)
The fund with half the yield delivered:
130% more capital
12% more annual income
Actual wealth creation instead of slow liquidation
This is NAV erosion in action.
And most income investors don't see it until it's too late.
The 5 Tests Every Fund Must Pass
I don't buy any options-based ETF until it clears all five hurdles:
1. Sector Conviction I need multi-year bullish conviction on the underlying assets. No amount of yield matters if the sector is dying.
2. NAV Integrity The fund must maintain or grow its net asset value. Structural decay is non-negotiable... it disqualifies the fund immediately.
3. Proven Performance 10-20% total returns over time. Not just distributions, actual total returns that prove the strategy works in real markets.
4. Realistic Yields Below 40%. Anything higher is almost always unsustainable!! Either returning your capital, capping too much upside, or both.
5. Intelligent Options Strategy Out-of-the-money strikes, thoughtful expirations, dynamic management. Not weekly ATM covered calls that sacrifice all upside.
When a fund passes all five tests, you get something rare: income without destroying your future.
The 12 US Funds That Pass
Here's the complete list, organized by provider:
XFunds/Nicholas
YieldMax
TappAlpha
REX Shares
Roundhill
NEOS Investments
Kurv
Goldman Sachs
Every single one has demonstrated:
Sustainable distribution mechanics
Options strategies that don't cap 100% of upside
NAV stability or growth over extended periods
Exposure to sectors with genuine long-term potential
Why Most High-Yield Funds Fail
The mechanics matter more than the marketing.
The Destroyers Do This:
Write aggressive weekly covered calls or options-based strategies
Maximize short-term premium at the expense of all upside
Miss every significant rally
Liquidate positions slowly as shares get called away
Distribute more than the strategy actually earns
These 12 Do This:
Use strikes 10-15% out-of-the-money
Monthly or quarterly expirations (not weekly)
Adjust strikes dynamically based on volatility
Use put-write strategies that preserve upside
Actually earn what they distribute
The difference in outcomes?
Bad funds cap 100% of upside and still erode NAV.
These funds capture 60-80% of upside moves while generating income.
Understanding Real NAV Decay
There's a critical distinction most investors miss.
This Is NOT NAV Decay:
Your tech fund drops 15% because the Nasdaq corrects.
This is market volatility
Your NAV reflects underlying asset prices
It recovers when the market recovers
This IS NAV Decay:
Your fund's structure systematically destroys value regardless of market direction:
Distributions exceed what the options strategy earns
Aggressive covered calls cap all upside in rallies
Shares constantly called away below fair value
Poor management and high fees compound the damage
When NAV decay is structural, no bull market saves you.
The fund's mechanics are the problem.
These 12 funds avoid structural decay entirely.
The Wealth-Building Math
This has never been about maximizing yield.
It's about maximizing total wealth while generating income.
Five Years Out:
The High-Yield Trap (45% yield, -12% NAV):
Your $10K → $5,300 (-47%)
Annual income: $2,385 (down 47%)
The Wealth Builder (22% yield, +4% NAV):
Your $10K → $12,167 (+22%)
Annual income: $2,677 (up 22%)
Lower yield wins.
More capital. More income. Actual compounding that works for you.
What You Need To Look For
Four indicators separate winners from traps:
NAV stability – Consistent or growing net asset value
Sustainable yields – Below 40%, ideally 15-25%
Smart options mechanics – OTM strikes, longer expirations, dynamic management
Bullish sectors – Tech, semiconductors, crypto, broad indexes with tailwinds
These 12 tickers check every single box.
My Non-Negotiable Checklist
Before adding any options ETF to your portfolio, run it through this filter:
Sector conviction – Multi-year bullish thesis on the underlying assets
NAV integrity – Zero structural decay
Performance proof – 10-20% total returns demonstrated over time
Yield reality – Below 40%, sustainably earned
Strategy intelligence – Options mechanics that preserve meaningful upside
When all five criteria align, you get what these 12 US funds deliver:
Income that builds wealth instead of destroying it.
Final Word
The US options-based ETF market is overflowing with wealth traps disguised as income solutions.
50% yields that turn $10K into $5K. Weekly distributions that are just your capital being returned. Funds that cap 100% of your upside to maximize short-term premium.
Don't fall for it.
These 12 US tickers prove you can generate meaningful income while maintaining capital integrity.
They've passed every test.
Your portfolio and your future, deserve funds that actually work. 
