Closed-end funds (CEFs) are known for their high yield but typically hold assets that generate income at irregular intervals. However, most income investors prefer consistency when it comes to yield.
To bridge that gap, CEF managers estimate their long-term total return (which includes both portfolio income and expected capital gains) and aim to distribute that amount at regular intervals, usually monthly. This is called a managed distribution policy.
To meet those consistent distribution targets, CEFs can use a combination of sources: income generated by the holdings, realized capital gains from selling appreciated assets, return of capital (RoC) — which is essentially the investor’s own money being returned — or gains that have yet to be realized.
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All of this turns quarterly or annual income into smooth monthly payments. The tax treatment of each distribution is ultimately determined at year-end, based on the fund’s accounting.
Some income-focused exchange-traded funds (ETFs), particularly those using derivative strategies like options selling, follow a similar approach. But increasingly, ETFs issuers are moving from monthly to weekly managed distribution frequencies.
For retirees or income-focused investors who want to match their cash flow with expenses, receiving regular income every week rather than once a month can help with budgeting and peace of mind.
“In our view, the weekly payout structure has durable applications to investment strategy,” explains Thomas DiFazio, ETF strategist at Roundhill Investments. “Weekly payers help investors manage their portfolios on a week-to-week basis, providing the flexibility to reinvest, time other investments or fund lifestyle expenses with each payout.”
Here are six of the best weekly paying ETFs to buy today:
| ETF | Expense ratio | Distribution yield |
| Roundhill Weekly T-Bill ETF (ticker: WEEK) | 0.19% | 4.1% |
| Roundhill S&P 500 0DTE Covered Call Strategy ETF (XDTE) | 0.97% | 31.9% |
| Roundhill Bitcoin Covered Call Strategy ETF (YBTC) | 0.96% | 29.1% |
| YieldMax AI & Tech Portfolio Option Income ETF (GPTY) | 0.99% | 35.3% |
| Defiance Nasdaq 100 Enhanced Options & 0DTE Income ETF (QQQY) | 1.00% | 39.4% |
| Defiance R2000 Enhanced Options & 0DTE Income ETF (IWMY) | 1.02% | 52.7% |
Roundhill Weekly T-Bill ETF (WEEK)
Individual Treasury bills don’t generate regular income. Instead, they’re purchased at a discount and pay out their face value at maturity, with the difference being your return. When packaged into an ETF, this typically produces monthly income distributions. But WEEK, launched in March, now pays income weekly. The ETF goes ex-distribution every Tuesday with payments landing by Wednesday.
Like other T-bill ETFs, WEEK is considered very safe. The underlying assets are ultra-short-term government securities with top-tier credit ratings. Right now, investors can expect a 4.1% distribution yield and pay a reasonable 0.19% expense ratio. “We view WEEK as an attractive defensive option, offering access to a safe-haven asset with the potential to generate income,” DiFazio says.
Roundhill S&P 500 0DTE Covered Call Strategy ETF (XDTE)
Most traditional covered call ETFs sell options that expire in about a month. But XDTE uses daily expiring options, also known as zero-day-to-expiry, or 0DTE, options. These short-term contracts allow the fund to capture rapid time decay while still maintaining overnight exposure to the S&P 500, potentially allowing for better upside capture compared to older covered call ETFs.
“By tapping into structural mispricings in the 0DTE market, XDTE can potentially dampen portfolio volatility while generating steady weekly income,” DiFazio says. XDTE currently pays a high 31.9% yield, with Thursday and Friday being the ex-distribution and payout dates, respectively. However, investors should note that yields can fluctuate and the 0.97% expense ratio is on the high side.
Roundhill Bitcoin Covered Call Strategy ETF (YBTC)
The general rule with covered calls is that higher volatility in the underlying asset means higher premiums. That’s exactly why YBTC can offer a massive 29.1% distribution yield. The fund sells options tied to the iShares Bitcoin Trust ETF (IBIT) and the Cboe Bitcoin U.S. ETF Index (CBTX), which are both highly volatile sources of indirect crypto exposure. YBTC charges a 0.96% expense ratio.
“From our perspective, Bitcoin’s propensity for price swings creates opportunities for investors seeking cryptocurrency exposure while receiving compensation through weekly distributions,” DiFazio says. Like XDTE, YBTC goes ex-distribution on Thursdays and pays out every Friday. Just be aware that Bitcoin’s volatility cuts both ways, so this options-based ETF is not a low-risk income play.
YieldMax AI & Tech Portfolio Option Income ETF (GPTY)
GPTY gives investors a way to tap into the volatility of artificial intelligence (AI) and tech-focused companies for high income generation. Unlike other YieldMax ETFs that use synthetic exposure, GPTY directly owns the stocks in its portfolio. Current holdings include Nvidia Corp. (NVDA), Palantir Technologies Inc. (PLTR), Microsoft Corp. (MSFT) and Meta Platforms Inc. (META).
Because these names are heavily traded and highly volatile, they come with rich options markets. GPTY actively sells options based on pricing levels and implied volatility and, as a result, the fund currently yields 35.3% with weekly distributions. However, investors should note that the trade-off for that high income is severely capped upside on price appreciation. The ETF charges a 0.99% expense ratio.
Defiance Nasdaq 100 Enhanced Options & 0DTE Income ETF (QQQY)
0DTE options strategies aren’t just about selling calls; they can also involve selling puts. The risk-reward trade-off is different, but the basic principle is the same: Take advantage of high volatility and rapid time decay. For a fund that uses this approach tied to the tech and growth-stock-heavy Nasdaq-100 index, consider QQQY. This ETF sells in-the-money (ITM) puts on a daily basis to generate income.
QQQY’s investment strategy currently supports a sky-high 39.4% distribution yield, paid weekly. However, the fund’s price has shown a pattern of steady decay over time due to the structural drag of repeatedly selling ITM puts. This may require a reverse split of the ETF’s shares in the future. Investors also need to factor in the steep 1% expense ratio that comes with this complex options-based strategy.
Defiance R2000 Enhanced Options & 0DTE Income ETF (IWMY)
The Nasdaq-100 and S&P 500 are common benchmarks for options-selling strategies due to their liquidity and robust options markets. But the Russell 2000 index, which captures the small-cap segment of the market, offers even more volatility, making it an appealing target for 0DTE options-selling strategies. For this approach, consider IWMY. Like QQQY, IWMY sells ITM 0DTE puts daily.
However, the underlying index’s higher volatility enables IWMY to deliver a massive 52.7% distribution yield. However, that income comes at a cost: Small-caps are riskier and more sensitive to market moves, and the mechanics of constant ITM put selling have historically led to steady price decay. IWMY also carries a high 1.02% expense ratio, which can eat into returns over the long term.
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6 Best ETFs for Weekly Income originally appeared on usnews.com
