DIVO vs SPYI: Which Is the Better Pick in 2026?

Overview

DIVO and SPYI are both equity ETFs that use covered call options to generate monthly income, but they pursue fundamentally different strategies. DIVO overlays calls on a basket of dividend-paying stocks managed by Amplify, while SPYI writes calls against the S&P 500 Index itself. The result: SPYI targets a 11.69% distribution rate versus DIVO's 4.66%, reflecting a much more aggressive income harvest through options.

How they differ

The biggest difference is underlying exposure and call intensity. DIVO holds dividend-paying equities and uses calls opportunistically; SPYI mechanically writes calls on the full S&P 500, generating roughly 2.5x the yield. DIVO's beta of 0.54 suggests its portfolio and option strategy dampen overall market moves, while SPYI's beta of 0.7 stays closer to broad market behavior despite its income overlay. DIVO has been running since late 2016 with $7.61B in assets; SPYI launched in mid-2022 with $11.4B, indicating rapid inflows chasing its higher yield despite its shorter track record. Expense ratios are nearly identical (0.56% vs. 0.68%), so the yield gap flows almost entirely from call intensity, not fee drag.

Who each is best for

• DIVO: Fits investors seeking modest, steady income from dividend stocks who accept moderate call writing and want a fund with a decade-plus operational history. The lower yield and defensiveness suit those who prioritize capital stability alongside distributions.

• SPYI: Fits investors pursuing aggressive current income from broad-market exposure who understand that high call writing caps upside significantly and accept the risk of a fund with limited real-world performance history across market cycles.

Key risks to know

• NAV erosion at high distribution yields. SPYI's 11.69% distribution rate far exceeds typical S&P 500 earnings yields, suggesting material return-of-capital treatment. Over time, aggressive distributions can erode the NAV unless underlying equities appreciate meaningfully—a particular concern for a fund that has operated less than two years.

• Call assignment and capped upside. Both funds systematically sell calls, which caps gains if the underlying rallies sharply. SPYI's broader index exposure means missing full participation in any sustained bull market; DIVO's lower yield suggests more conservative strike selection, leaving more upside available.

• Short track record for SPYI. The fund's inception in August 2022 means it has operated in only a rising-rate, volatile environment. Its ability to sustain high distributions through a dividend downturn or extended market weakness remains unproven.

• Basis drift and expense compounding. Both funds incur options costs and management fees that reduce net returns. At high distribution rates, this drag compounds—particularly for SPYI, where the gap between distributions and underlying portfolio total return may widen in lower-volatility or lower-yield regimes.

Bottom line

If you want meaningful income with lower volatility and a longer operating history, DIVO's 4.66% yield and decade-plus track record offer a more conservative trade. If you're drawn to maximum monthly distributions and can tolerate call cap risk and NAV uncertainty, SPYI delivers more than double the yield—though at the cost of an unproven long-term model. Past performance does not guarantee future results, and both funds' use of derivatives means realized returns may diverge meaningfully from their underlying equity performance in different market environments.