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

Overview

SPYI and TSPY are both equity ETFs using options overlay strategies on S&P 500 exposure to generate high monthly income. SPYI tracks the S&P 500 Index directly with a 11.69% distribution rate and $11.4B in assets since August 2022. TSPY holds the SPDR S&P 500 ETF (SPY) and uses 0DTE (zero days to expiration) options to target a 13.90% yield, but launched just six months ago with $316M in AUM.

How they differ

The biggest difference is distribution yield: TSPY targets 13.90% versus SPYI's 11.69%, a gap that partly reflects TSPY's use of daily-expiring options versus SPYI's monthly structure. TSPY also holds SPY as its underlying vehicle rather than the index itself, which adds a layer of indirection and may create subtle timing or tracking differences. On scale and maturity, SPYI has nearly 36× the AUM ($11.4B versus $316M) and more than two years of track record, while TSPY is less than one year old. The expense ratios are nearly identical (0.71% for TSPY versus 0.68% for SPYI), so fees are not a meaningful differentiator. TSPY's beta of 0.935 sits closer to the full S&P 500 market beta than SPYI's 0.7, suggesting TSPY may amplify upside or downside moves in the underlying index more than SPYI does.

Who each is best for

SPYI: Fits investors seeking a monthly-income ETF on the S&P 500 with established scale, lower expense drag, and a more conservative beta profile that absorbs less of the index's volatility.

TSPY: Fits investors comfortable with a newer fund and willing to chase a higher yield through more aggressive daily options mechanics, if they value the extra income distribution over longevity of the strategy.

Key risks to know

• NAV erosion at high distribution yields: Both funds distribute well over 11% annually. When the underlying index appreciates less than the distribution rate, NAV will erode over time. TSPY's 13.90% yield makes this risk more acute than SPYI's 11.69%.

• 0DTE options concentration in TSPY: Using zero-days-to-expiration options daily introduces execution risk, slippage on opening and closing, and potential gap risk if the market gaps overnight. This structure is newer and less seasoned than monthly-expiry strategies.

• Cap on capital gains in TSPY: TSPY's prospectus notes a limit on potential investment gains in exchange for income prioritization, meaning upside participation in a strong bull market may be capped or muted compared to unlevered S&P 500 exposure.

• Early track record for TSPY: With only six months of live performance, TSPY has not weathered a full market cycle, earnings season volatility, or a significant drawdown. SPYI's two-year history provides more evidence of how the strategy behaves in different market regimes.

• Index versus ETF-as-underlying timing: SPYI holds the index; TSPY holds SPY. Slight NAV gaps, creation/redemption mechanics, or intraday tracking differences between SPY and the index could cause divergence, especially in volatile markets or around options expiration.

Bottom line

If you prioritize a seasoned options-income strategy with proven scale and lower volatility drag, SPYI's 11.69% yield and $11.4B AUM stand out. If you're chasing maximum income and comfortable with a newer fund using daily-expiry mechanics and a capped-upside structure, TSPY's 13.90% yield may appeal—but the extra income comes with less operating history and more structural complexity. Past performance does not guarantee future results; both strategies depend on continued S&P 500 stability and options-market liquidity to sustain their distribution rates.