A monthly payer I’ve been tracking just raised its distribution 15.78% over the past year. The share price went UP about 15% over the same stretch, and the fund beat the S&P 500 on total return, which almost never happens with an option income ETF.
Most high yield funds pay you by slowly handing back your own capital. The payout shrinks, the share price bleeds, and you end up with less money working for you every year. This fund does the opposite, and the reason comes down to how it writes its calls.
The NAV HAS INCREASED here— which is why I’m excited to share it with you all.
I ran a backtest on it. $50,000 at launch with every payment reinvested grew annual income from $4,777 to $6,024 in two years, without adding a single dollar. It yields about 8.75% and pays monthly, and paid subs get the ticker, the holdings and the tax breakdown below. I went through the wider group of these funds in I Analyzed 10 Option Income ETFs.
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Why Most Monthly Payers Shrink
A typical option income fund buys a basket of stocks and then sells call options against those exact stocks. Each call hands away the gains above a set price, so when the market runs, the fund pockets a premium and gives up the rally. That trade works well in a flat year and badly over several, because the share price gets stuck while the payouts keep drawing down capital.
The problem is that the yields offered by these income ETFs are often times unsustainable. This is where NAV erosion comes in.
This fund has INCREASED ITS NAV since inception and total AUM continues to rise because of the success.
Two design choices account for that gap. It caps far less of its upside than its peers do, and it owns stocks chosen because they keep raising their own dividends.
For instance, it was determined that this fund was still able to capture ~73% of the monthly upside of the market, unlike most other option ETFs.
The fund also offers a starting dividend yield of about 8.7%.
So $10,000 invested will earn you about $870 annually.
$100,000 invested earns you $8,700 annually.
$1M invested earns you $87,000 annually. You get the idea.
The monthly distribution grew 15.78% over the past year and 6.86% a year across three years, according to stockinvest.us, with the June payment coming in at $0.204 a share. The fund has an excellent track record of keeping distributions within a tight range. So if you care about income stability, this would be a great fund to consider.
The fund we’re highlighting today is the…
RDVI: Dividend Growers
The fund is RDVI, a First Trust product sub-advised by Vest, launched in October 2022. It holds roughly fifty companies drawn from Nasdaq's rising dividend screen, which looks for businesses with a history of raising payouts and the finances to keep going. Its payout goal is set at about 8 percentage points above whatever the S&P 500 yields, and it fills the space between what its stocks pay and that target with option premium, according to the First Trust fund pages.
Financials make up 31.38% of the fund, technology 24.55% and industrials 22.13%. The industrial names include GE Vernova, which sells the turbines and grid gear the AI buildout runs on.
The top ten mixes three chip equipment makers, Lam Research, Applied Materials and KLA, with insurers Travelers and Allstate and custody bank BNY. That combination gets you a piece of the semiconductor spending cycle without the valuation that usually comes with it, since the whole portfolio trades near 16.98 times earnings against roughly 26.36 for the S&P 500.
What The Monthly Check Is Made Of
First Trust’s latest Section 19(a) notice breaks this fiscal year’s distributions into three pieces, and the split tells you where to hold the fund. It’s posted alongside the distribution history.
Roughly 48.6% came from short-term gains on the option book, 44% was return of capital, and 7.5% was income from the dividends the stocks paid. Return of capital isn’t taxed when you receive it, since it lowers your cost basis and gets settled when you sell. Short-term gains are taxed like wages.
That mix makes an IRA or HSA the natural home for RDVI if you’re reinvesting, because the short-term gains portion never gets taxed there and the compounding runs uninterrupted. In a taxable account the return of capital piece still helps, just less than in funds where nearly the whole payout is classified that way.
How It Held Up When Stocks Went Nowhere
The best test so far came between November 2025 and February 2026, when big tech stalled over spending worries and the major indexes chopped sideways. RDVI returned 8.37% over those four months while the S&P 500 made 0.87% and the Nasdaq 100 lost 3.34%.
A weekly call writer is built for exactly that kind of market, since the option book harvested the chop while the dividend growers held their value better than the growth names leading the big indexes.
Net asset value sits at $29.24 and assets have grown to $3.79 billion, with a worst three-month stretch of 11.73% and a best of 15.07% since launch, according to Schwab's fund report. A NAV climbing alongside rising assets is what you want from a high-yield fund, since it shows the payout isn't eating the base.
Against Three Popular Alternatives
RDVI is the most expensive fund in the group and the smallest, and on total return since late 2023 it trails only GPIQ 0.00%↑, the Goldman fund built on the Nasdaq 100. Data comes from the issuers and Yahoo Finance.
SPYI 0.00%↑ pays the most at around 11.7% and grew its share price just 18.92% over the stretch, while RDVI’s price rose 45.96%. A higher payout pulls harder on the share price, and the gap between those two numbers is what that extra three points of yield cost. DIVO 0.00%↑ is the closest cousin since it also owns dividend payers, and RDVI beat it by nearly 20 points of total return.
For readers who already hold a tech-heavy option fund like GPIQ, RDVI works as the counterweight. Only about a quarter of its assets sit in technology, and its biggest bets are on banks, insurers and industrial companies that behave very differently when chips sell off. That pairing logic is the same one I used in Low Risk 10% Dividend Yield From One Fund.
Four Things To Check Before Buying It
A real bear market arrives. RDVI launched in October 2022, right at the bottom of the last one, so it has never been through a long decline. Its worst three months since launch was a loss of 11.73%, and a genuine recession could be deeper and longer than anything in that record, per Schwab’s report.
Financials and industrials fall together. More than half the fund sits in those two sectors, and a slowdown hits both at once. The calls soften a drop slightly and put no floor under it, so a sharp downturn would show up fully in the share price.
Markets calm down for a long stretch. Lower volatility means smaller weekly premiums. If the option book stops covering the gap to the target payout, more of each check would come from capital, and the rising NAV would stop rising.
The fee keeps it expensive. At 0.75% RDVI charges more than two and a half times what GPIQ does. That cost is easy to ignore when the fund is outperforming and much harder to justify in a year when it isn’t.