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

Overview

MLPI and SPYI are both ETFs that generate high monthly income through options-overlay strategies, but they target entirely different underlying assets. MLPI seeks exposure to master limited partnerships (MLPs) in the energy infrastructure sector and carries a 14.90% distribution rate, while SPYI uses S&P 500 Index constituents as its base and pays 11.69%. Both charge 0.68% in expenses, but differ fundamentally in volatility, tax treatment, and concentration risk.

How they differ

The core distinction is underlying exposure: MLPI focuses on MLPs—a narrow sector of energy infrastructure companies with specific tax and distribution characteristics—while SPYI is built on the broad S&P 500. This translates directly to risk and sustainability. MLPI's 14.90% yield is sourced from MLP distributions plus options income, but MLP distributions are generally taxed as ordinary income and often include return-of-capital components. SPYI's 11.69% yield comes from covered calls on 500 stocks and targets a more tax-efficient approach through Index-based exposure. MLPI also carries $46.4M in AUM and arrived in late 2025, whereas SPYI has $11.4B in AUM and launched in 2022—a meaningful gap in scale and track record. On volatility, MLPI reports a beta of 0.0 (a placeholder for MLPs' limited correlation tracking) while SPYI carries a 0.7 beta, suggesting it moves less than the broad market.

Who each is best for

* MLPI: Fits investors seeking high current income from energy infrastructure and who are comfortable with the volatility, sector concentration, and complex tax treatment of MLPs, including potential return-of-capital distributions.

* SPYI: Fits investors who want broad market exposure paired with a systematic income strategy and who prioritize tax efficiency and lower volatility relative to the S&P 500.

Key risks to know

* Yield sustainability and NAV erosion. At 14.90%, MLPI's distribution rate is materially higher than typical MLP yields, suggesting reliance on options premium and possible return-of-capital. At rates above 12–14%, NAV erosion becomes a measurable risk if underlying MLP distributions or option income deteriorates. SPYI, at 11.69%, sits in a similar zone and warrants similar scrutiny.

* MLP sector and commodity sensitivity. MLPI is concentrated in energy infrastructure and faces commodity price risk, regulatory shifts in pipeline operations, and refinancing risk during higher-rate environments. This is a structural bet on energy, not a diversified income strategy.

* Covered-call options decay. Both funds rely on writing options to generate income. If market conditions or implied volatility shift, option premiums may compress, reducing income without a corresponding decline in the funds' costs or prices. MLPI's options overlay is undisclosed in detail; SPYI's covered-call framework is more transparent but still subject to time decay and assignment risk.

* Scale and liquidity disparity. MLPI's $46.4M AUM and recent December 2025 inception create liquidity and operational risk; a small fund may face closure or forced selling in stressed conditions. SPYI's $11.4B scale provides institutional backing and tighter trading spreads.

* Tax treatment complexity. MLPI's distributions will include significant ordinary income and return-of-capital components due to its MLP holdings, complicating tax reporting. SPYI targets tax efficiency but still distributes ordinary income from covered-call premiums.

Bottom line

If you seek aggressive income from a concentrated energy play and accept MLP tax complexity, MLPI delivers a higher rate; if you want high income within a diversified framework with greater liquidity and simpler tax positioning, SPYI's broader base and $11.4B scale offer a smoother structure. Neither fund guarantees principal stability at these yield levels. Past performance does not predict future results.