Best Monthly Dividend ETF for Passive Income (OMAH vs SPYI vs QQQI)

Added: 2026-05-13

[00:00:00]Here's a number that stops most people cold. To retire on $60,000 a year from dividends using a typical 4% yielding ETF, you need $1.5 million invested.

[00:00:12]That's the math most financial planners give you. And for a lot of people, that number feels impossibly far away. But there's a different set of ETFs quietly changing that equation. Three funds, all paying monthly dividends, are generating yields between 11.7% and 15% annually. And at a 15% yield, that same $60,000 income target only requires $400,000 invested. That's not a rounding error. That's a $1.1 million difference. Now, before you start moving money around, I want to walk you through exactly what these funds are, how they actually work, and where each one fits.

[00:00:51]Because the yield number is only the beginning of the story. The more interesting part is what sits underneath it. By the end of this video, you'll understand how spy, QQQI, and OM ah each generate their income, what the real trade-offs are between the three, and which one actually fits your situation.

[00:01:11]Whether you're building passive income, protecting against volatility, or looking for a smarter place to park capital in or near retirement, no hype, just the mechanics, the numbers, and a clear framework. Let's get into it. Most dividend investors today are parked in something like SCHD or VM. Solid funds, respectable companies, yields sitting somewhere between 3 and 4%. And there's nothing wrong with that strategy, but here's what that math actually looks like in real life. If you're contributing $500 a month and earning a 3.5% yield, you're looking at roughly $14 a month in dividends on a $5,000 portfolio. After 5 years of consistent investing, that might grow to $80 or $90 a month. It's progress, but it's slow.

[00:01:59]The problem isn't discipline. The problem is that most people don't have 30 years of runway. they have 10 or 15.

[00:02:06]And at a 3.5% yield, closing a retirement income gap in that time frame is genuinely hard. That's the context.

[00:02:14]That's why these three newer funds have drawn so much attention. Now, the natural reaction when you see an 11%, 13%, or 15% yield is skepticism. And that's actually healthy because in most cases, a yield that high is a red flag.

[00:02:30]It usually means the fund is cutting into its own capital to pay you, the price is collapsing, or the distribution is about to get slashed. But these three funds work differently. They're not pulling from capital to manufacture a dividend. They're generating income through something called a covered call option strategy. Essentially selling the right to buy their holdings at a certain price and collecting a premium for doing so. That premium is what funds the distribution. It's not magic. It's a genuine income mechanism that institutional investors have used for decades. The question isn't whether it works. The question is what does it cost you? And that's the real conversation.

[00:03:08]Let me walk through each fund individually because they're more different than they first appear. SPYI, the S&P 500 highinccome ETF. SPYI tracks the S&P 500. It holds the same broad basket of 500 plus companies you'd find in a standard index fund. then layers a covered call strategy on top to generate additional income. The current trailing 12-month distribution yield sits at approximately 11.7%.

[00:03:36]That's the lowest of the three, but it comes with the broadest diversification, 500 stocks across every major sector.

[00:03:43]Here's what makes SPYI genuinely interesting for taxaware investors. The fund uses index options, which qualify for what's called section 1256 treatment under the IRS. That means gains are taxed at a blended rate of 60% long-term, 40% short-term, regardless of how long you've held the fund. For anyone investing in a taxable brokerage account, that distinction matters a lot more than most people realize. The trade-off covered calls cap your upside.

[00:04:12]In 2023, SPYI delivered a total return of 18.1% while the S&P 500 delivered 26.2%.

[00:04:21]you gave up roughly 8 percentage points of growth in exchange for consistent monthly income. In 2024, the gap narrowed. SPYI returned 19% in total versus the S&P 500's 24.9%.

[00:04:36]So, the cost of that income ceiling has been real, but it varies yeartoyear.

[00:04:41]SPYI launched in August 2022, making it the most established of these three funds. That's not a long history, but it does include meaningful market environments, a down year in 2022, a strong bull market in 2023, and a solid 2024. Expense ratio 0.68%.

[00:05:00]Best fit income focused investors who want S&P 500 exposure with manageable tax treatment and lower volatility.

[00:05:08]QQQI, the NASDAQ 100 highinccome ETF.

[00:05:13]QQQI does what SPYI does, but with the NASDAQ 100 as its base. That means your underlying exposure is Apple, Microsoft, Nvidia, Meta, the companies that have driven the market's biggest gains over the last decade. Distribution yield approximately 13.5% on a trailing 12-month basis, higher than SPYI, and it carries the same favorable section 1256 tax treatment.

[00:05:38]Now, here's where the comparison gets genuinely interesting. Look at the past year. QQQ, the straight NASDAQ 100 index fund, delivered a total return of roughly 38.6%.

[00:05:51]QQQI over that same period returned approximately 29.2% in total. On the surface, that's a 9-point gap, and it's real. You do give something up. But here's the reframe. QQQI was paying you a 13.5% yield during that period. you were receiving that income in cash every month while still participating in roughly 75 cents of every dollar the NASDAQ 100 gained. Whether that trade makes sense depends on whether you need the cash now, or whether you can afford to let gains compound. For someone who genuinely needs cash flow today, a retiree, someone cutting back on hours, someone building a dividend income stream, that monthly income isn't just a number. It changes the practical equation. The concern worth flagging.

[00:06:39]QQQI launched in January 2024. We have just over a year of live data. We haven't seen how it behaves through a real prolonged downturn, only through a bull market. The NASDAQ dropped over 30% in 2022. We don't have QQQI data for that environment. Expense ratio 0.68%.

[00:07:01]Best fit investors bullish on tech who want high monthly income and understand the fund's limited track record. OM the Berkshire select income ETF. This is the fund generating the most questions lately. And honestly, it's easy to see why. OMHI is built around the top holdings of Berkshire Hathaway's portfolio. Apple, Bank of America, Chevron, Coca-Cola, American Express, Accidental Petroleum. These are companies Warren Buffett has spent decades carefully selecting. OMHI takes that curated list, builds a portfolio around it, applies a covered call strategy, and targets an annual income of 15% paid monthly. The trailing 12-month yield is currently tracking right around that 15% target, which is notable. Some covered call funds drift away from their stated income targets over time. OMHI has so far delivered close to what it advertises. For investors who've always respected Berkshire's stockpicking philosophy, but lamented that Berkshire itself pays no dividend, this fund offers a genuinely interesting answer to that problem. The expense ratio is 0.95%.

[00:08:12]The highest of the three on a $100,000 portfolio. That's $950 a year versus $680 for SPYI or QQQI. It's not a dealbreaker, but it's worth factoring into your income math. The more significant concern is timing and track record. OMHI launched in March of 2025.

[00:08:32]That means as of this video, it has been operating for only about a year. We have zero data on how it performs in a down market, a volatile rate environment, or a period of underperformance in Berkshire's holdings. This is the newest and least tested of the three. There's also the concentration factor. SPYI spreads across 500 companies. QQQI across 100. OMHI's portfolio is significantly more concentrated around Bergkshire's core positions. That's a different risk profile, not necessarily worse, but meaningfully different. Best fit investors who believe in Buffett's investment philosophy and want the highest income target with a clear understanding that youth and concentration are real open questions.

[00:09:19]Here's the thing that rarely gets discussed clearly when people talk about these funds. The yield you see advertised is not a guarantee. It's either a target or a trailing figure.

[00:09:30]Covered call premiums fluctuate with market volatility. When markets are quiet and volatility is low, those premiums shrink and monthly distributions can come in lower than the headline number suggests. When volatility spikes, premiums are richer, but the underlying portfolio might be under pressure. The practical implication. Don't build a retirement budget around the maximum yield figure.

[00:09:53]Build around something more conservative, say 80% of the stated yield, and treat the upside as a bonus.

[00:10:00]That keeps you from being caught off guard when a monthly payment comes in lighter than expected. This also means the 15, 13.5, and 11.7% numbers we've been discussing are recent snapshots.

[00:10:12]They can and do move. Let me give you a clean way to think about which one fits your situation. If your primary goal is income stability with broad diversification, SPYI is the answer. It has the most companies, the longest track record of the three, and a three-year history that includes real stress events. The 11.7% yield is the lowest here, but it comes with the most ballast. If the market drops 20% you want 500 companies absorbing that not 100 or a concentrated Berkshire focused basket. If your primary goal is maximum income with tech exposure QQQI fits that goal. The yield is solid at 13.5%.

[00:10:54]The total return has been competitive even if it trails QQQ and the tax efficiency is meaningful in a taxable account for investors who believe in the long-term NASDAQ 100 story which has a very strong historical case. This fund converts that growth into monthly cash flow. If your primary goal is the highest income target and Bergkshire exposure, OMHI is the most intriguing of the three, but also the one requiring the most caution. I'd treat it as a smaller exploratory position until it has at least two or three years of data across different market conditions. The strategy makes sense. The team's credibility matters, but a concentrated fund with less than 18 months of history deserves a proportionally smaller allocation. One more practical point.

[00:11:40]These aren't mutually exclusive. Holding a combination more spy for stability, some QQQI for growth tilt, a smaller OMHI position for the income kicker is a reasonable approach for investors who have the portfolio size to diversify across strategies. Here's how to approach this practically. First, don't evaluate these funds on yield alone.

[00:12:03]Look at total return, price change plus distributions. That's the number that actually matters. Second, where you hold these matters. The section 1256 tax advantage of SPYI and QQQI is most valuable in a taxable brokerage account.

[00:12:20]In a Roth IRA, that advantage disappears entirely and the calculus shifts. Third, size your position appropriately. A reasonable income sleeve for most portfolios is 20 to 30% of total holdings. These are not funds to hold at 80% of your portfolio unless you've thought through the concentration and covered call risk very carefully.

[00:12:43]Fourth, watch distribution history monthly, not annually. Consecutive months of declining distributions are early signals worth noticing before it becomes a problem. Fifth, be patient with OMHI and QQQI specifically. Both are relatively new. Give a fund at least two full market cycles before committing a significant percentage of your capital to it. I started with that number, 400,000 versus 1.5 million. And I want to close there, too, because the real value in understanding these funds isn't just the yield. It's what the yield does to the timeline. It's the difference between retirement feeling like something that might happen someday and something that's actually within reach in the next decade. That doesn't make these perfect funds or risk-free strategies. Nothing is. Covered calls cap upside. Yields fluctuate. Short track records are real limitations. But the income tools available today are genuinely more sophisticated than they were 5 years ago. The tax efficiency is real. The monthly cash flow is real. And for investors who need income now, not 25 years from now, these funds deserve to be taken seriously and understood clearly. Which of the three fits your situation? Drop it in the comments. And if you're already holding any of them, I'd genuinely like to hear how the monthly distributions have looked, whether they've been consistent, growing, or starting to slip.