##  [# Option Income ETFs Offer Explosive Growth. Can it Last?](/sections/features/option-income-etfs-offer-explosive-growth-can-it-last) 

 

# Option Income ETFs Offer Explosive Growth. Can it Last?

 

 

\- Option income ETFs saw explosive growth in 2024 but many funds offer unsustainable yields.  
\- Invesco's senior portfolio manager warns some strategies return capital to investors while charging fees.  
\- Yields above 12% likely unsustainable given historical equity returns, expert says.



 

 

 

 

 [![DJ](/sites/default/files/styles/author_image_icon/public/2024-07/5.png?itok=LA-jevm_)](/authors/dj-shaw) 

[By DJ Shaw ](/authors/dj-shaw)

 Jul 25, 2025

 Edited by: Paul Curcio

 

 

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[Option income](/topics/covered-calls) exchange-traded funds experienced explosive growth in 2024, but investors chasing the highest yields may be falling into a trap, Invesco's John Burrello told etf.com in an interview.

Many new option income ETFs promise yields that are "unsustainable and unrealistic," the senior portfolio manager of the Invesco Income Advantage ETF Suite said, with some advertising returns of over 100%. These strategies are "basically designed to return investor principal back to them while charging fees in the process," Burrello added.

The warning matters because investors can use a simple test to avoid costly mistakes: If a fund's yield exceeds what the underlying equity market can reasonably deliver over time, the strategy is likely returning capital rather than generating true income, said Burrello. With the S&amp;P 500's long-term return around 11% to 12%, yields much higher than that should raise red flags.

Burrello, whose team at [Invesco (IVZ)](/stock/ivz) oversees $4.8 billion in options strategies, said option income ETFs have become the fastest-growing segment within [active ETFs](/topics/active-management). The growth is driven by client demand for a monthly income that isn't interest rate-sensitive.

"If you're distributing 20%, there is no way to support that yield, because you're not going to have a portfolio that returns 20%," Burrello said. "At best, you can expect maybe 10, 11, 12%, so where does the rest of that distribution come from? It's coming right out of capital."

Burrello called the flood of new launches "tourists in the space," referring to asset managers without options expertise trying to fill product gaps.

## Sustainable Approach

The Invesco Income Advantage ETF Suite launched three funds last July: the [**Invesco QQQ Trust ETF Income Advantage (QQA)**](/qqa), the [**Invesco S&amp;P 500 Equal Weight Income Advantage ETF (RSPA)**](/rspa), and the [**Invesco MSCI EAFE Income Advantage ETF (EFAA)**](/efaa). The funds target standard yields between 8% and 10%.

"We're very purposely not going to be among the highest yielding funds in the category, because we don't think that's a good way to build trust," Burrello said. "We want a balance of income and growth."

The ladder option overlays daily rather than monthly and maintains option coverage at about 50% of the portfolio, Burrello said. This design aims for 20% to 30% less volatility than benchmark indices while preserving upside participation.

What separates top performers is "a focus on outcomes first and the tools you use second," he added. The best strategies balance income, participation and defense, rather than maximizing yield alone.

Looking ahead, Burrello said his team is watching market uncertainty across both equities and rates. As long as investors struggle to manage risk while seeking steady income, option income strategies should continue growing, he noted.

 
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 [ DJ Shaw Finance Reporter ](/authors/dj-shaw) 

 

 

  A graduate of The University of Texas, Arlington with a BA in Communications, DJ has covered retirement plans, mortgage news, and financial advisor…   [View Bio](/authors/dj-shaw)

 



 

 


 Related Topics  [Covered Call](http://www.etf.com/topics/covered-calls) 

 [Laddered](http://www.etf.com/topics/laddered) 

 [Active Management](http://www.etf.com/topics/active-management) 

 [Invesco](http://www.etf.com/topics/invesco)