Forget QQQI: These 11 New ETFs Pay 27% (Without the Tech Risk)

Right now, the biggest thing I’m wrestling with is simple: my income stack is highly correlated.

If tech keeps running, that’s great. But if tech takes a hit, a big chunk of my portfolio gets hit all at once. The price of the funds compresses, the income potential gets pressured, and the whole stack starts moving in the same direction at the same time.

That’s concentration risk.

And to be clear, I’m not panicking about it. I’m not trying to “fix” it overnight. I may decide to keep riding that concentration because I still believe in the thesis. But I also want to understand what my alternatives are if I decide I want a little more balance later.

That’s where State Street’s sector premium income ETFs got my attention.

Before this, if I wanted to build a sector-diversified income sleeve, I’d have to mix multiple fund families, multiple fee structures, multiple payout schedules, and multiple option overlay strategies. It would be messy. It would be harder to manage. And I’d have less confidence that I was comparing apples to apples.

Now, I can look across utilities, energy, healthcare, real estate, industrials, financials, staples, tech, and more—all inside the same basic fund architecture.

That’s a big deal.

State Street launched one premium income ETF for each major S&P 500 sector. Every one of them follows the same general formula:

• Buy the underlying sector exposure

• Sell call options on that sector

• Collect option premium

• Distribute income monthly

The full lineup includes:

• XLUI – Utilities Premium Income ETF

• XLEI – Energy Premium Income ETF

• XLBI – Materials Premium Income ETF

• XLII – Industrials Premium Income ETF

• XLCI – Communication Services Premium Income ETF

• XLYI – Consumer Discretionary Premium Income ETF

• XLSI – Consumer Staples Premium Income ETF

• XLFI – Financial Premium Income ETF

• XLVI – Healthcare Premium Income ETF

• XLKI – Technology Premium Income ETF

• XLRI – Real Estate Premium Income ETF

All of them distribute monthly. All of them use the same general covered call structure. All of them carry a 0.35% expense ratio, which is pretty reasonable for this category.

And for the first time, I can actually think about sector diversification as a cohesive system rather than a collection of random funds stitched together.

I wouldn’t just buy random sector funds and call it diversification. I’d think about the portfolio in layers—what role each sector plays, what kind of yield it produces, and how it behaves under different market conditions.

Here’s how I’d break it down.

High-Yield Sector Candidates: Income With a Job to Do

XLUI – Utilities Premium Income ETF

Yield: around 20%

If I were building a defensive income core, utilities would be one of the first places I’d look.

Utilities are boring in the best possible way. Regulated monopolies. Power generation. Electricity distribution. Businesses people still pay for in recessions, bear markets, and inflationary periods. You’ve got names like Duke, Dominion, and NextEra underneath that kind of exposure.

The base sector yield isn’t huge, but the covered call overlay pushes the income meaningfully higher. If I wanted a part of my portfolio whose job was to stay steady when growth stocks wobble, utilities would be a strong candidate.

This is the kind of fund I’d view as ballast.

XLEI – Energy Premium Income ETF

Yield: around 27%

Energy is a very different animal.

If utilities are defensive ballast, energy is tactical firepower. This is where you get oil, gas, integrated energy producers, and the kind of volatility that can really juice option premiums. That’s why the yield here is so high.

If oil spikes, this fund could be a beast. If energy prices fall, those distributions could compress just as quickly.

So if I were using XLEI, I wouldn’t think of it as “safe diversification.” I’d think of it as macro exposure—a way to benefit from geopolitical tension, inflation pressure, or commodity strength without directly owning oil futures or trying to time energy stocks myself.

XLRI – Real Estate Premium Income ETF

Yield: around 21% to 22%

Real estate is interesting because it brings a different kind of income profile into the portfolio.

REITs already have to distribute a large portion of taxable income, which makes them natural candidates for income-focused strategies. Layer covered calls on top of that and suddenly you’ve got a sector that can throw off meaningful cash flow while also giving you exposure to real assets.

This is one I’d think about as an inflation-sensitive income sleeve. It won’t behave exactly like tech. It won’t behave exactly like utilities either. It adds another dimension to the portfolio, especially if you’re trying to hedge against a world where rates, inflation, and property values matter again.

XLII – Industrials Premium Income ETF

Yield: around 17.5%

Industrials are one of those sectors I’d use as a proxy for economic momentum.

When the economy is humming, industrials tend to benefit. More construction, more transportation, more manufacturing, more infrastructure spending. When the economy weakens, they can roll over fast.

So I wouldn’t use this as a defensive position. I’d use it as a cyclical growth complement—something that could perform well in a soft landing or expansionary environment without tying me even more tightly to tech.

XLBI – Materials Premium Income ETF

Yield: around 16%

Materials give you exposure to the things the modern economy literally gets built from—metals, chemicals, lithium, copper, rare earths, and commodity-sensitive industrial inputs.

This is a sector I’d think of as a supply chain and inflation hedge. It’s sensitive to global demand, commodity cycles, and geopolitical shocks. It won’t always move with tech, which is exactly why it interests me as a diversifier.

If inflation came back hard, or supply constraints hit certain industries, materials could behave very differently than the Nasdaq.

That’s useful.

XLFI – Financial Premium Income ETF

Yield: around 14% to 15%

Financials are a rate-sensitive income play.

Banks, insurers, brokers, capital markets businesses—this sector is tied closely to interest rates, credit conditions, and the health of the economy. If rates rise or net interest margins improve, financials can benefit. If credit deteriorates or recession fears spike, they can get hit.

This isn’t a sector I’m personally most excited about right now, but if I wanted to add a sleeve that behaves differently than tech and is tied more directly to the interest-rate cycle, this would be the place.

XLVI – Healthcare Premium Income ETF

Yield: around 12% to 14%

Healthcare is one of the most interesting ones in the entire lineup to me.

Pharma, medical devices, providers, healthcare infrastructure—this is a sector with a real long-term demographic tailwind behind it. People age. Demand for healthcare doesn’t disappear in recessions. And compared to a lot of other sectors, healthcare tends to be less cyclical.

If I were building a non-tech diversification sleeve that I actually wanted to keep for years, healthcare would probably be one of the first places I’d look.

This is one of the funds I’m most interested in adding over time.

XLSI – Consumer Staples Premium Income ETF

Yield: around 11% to 12%

Staples are classic recession insurance.

Think household products, food, beverages, basic consumer goods—the kinds of things people keep buying whether the economy is booming or breaking. Procter & Gamble. Coca-Cola. General Mills. That type of exposure.

The yield isn’t as high as energy or utilities, but that’s the trade-off for stability. If I wanted a piece of the portfolio designed to hold up when everything else gets shaky, staples would absolutely be in the conversation.

XLCI – Communication Services Premium Income ETF

Yield: around 12% to 13%

Communication services sits somewhere in between defensive and growth depending on what’s under the hood. Telecom, media, entertainment, digital communication platforms—it’s a mixed bag, but it can offer relatively stable cash flow and a different economic sensitivity than straight-up tech.

I’d think of this one as a supporting player rather than a core anchor. It’s not the first fund I’d buy, but it’s a useful diversifier if I wanted to round out a broader sector sleeve.

XLYI – Consumer Discretionary Premium Income ETF

Yield: around 8% to 10%

This one is a pure read on the consumer.

Retailers, restaurants, travel, luxury spending—this sector does well when people feel good and spend freely. It gets hit first when consumers pull back. That makes it one of the more cyclical parts of the lineup.

Personally, this isn’t one I’d rely on as a long-term anchor. But if I wanted a barometer for consumer health inside an income portfolio, this would be it.

XLKI – Technology Premium Income ETF

Yield: around 6% to 8%

This is the State Street tech version of what I already have a lot of exposure to elsewhere.

If I wanted to keep tech exposure but move more of my portfolio under one consistent State Street sector umbrella, I could use XLKI. But realistically, I probably wouldn’t. I already like the tech exposure I have through funds like QQQI, and I think the yield profile elsewhere in tech is more attractive for what I’m trying to build.

So for me, XLKI is more of a “good to know it exists” fund than a likely buy.

The Way I’d Actually Group These Funds

If I were building out a diversified sector income framework, I wouldn’t treat all 11 funds equally. I’d think about them by job description.

1. Defensive Core

These are the funds I’d look at if I wanted to reduce volatility and hold up better during downturns:

• XLUI – Utilities

• XLSI – Consumer Staples

• XLVI – Healthcare

This would be the “don’t blow up when growth gets hit” layer of the portfolio.

2. Growth / Cyclical Layer

These are the funds I’d use if I wanted upside when the economy is improving:

• XLII – Industrials

• XLYI – Consumer Discretionary

• XLKI – Technology

These would likely perform better in stronger growth environments, but they’d also be more vulnerable in a downturn.

3. Macro / Tactical Exposure

These are the funds I’d use when I want exposure tied to rates, inflation, commodities, or macro events:

• XLEI – Energy

• XLBI – Materials

• XLFI – Financials

This is where you’d get your oil exposure, inflation sensitivity, and rate-cycle responsiveness.

4. The Glue

These are the sectors I’d use to round things out:

• XLCI – Communication Services

• XLRI – Real Estate

Not necessarily first buys for me, but useful for completing the framework.

If I were going to gradually move away from an 80% tech concentration, I’d probably do something like this:

50% in my existing core

This would still be QQQI and SPYI. I’m not abandoning the tech-heavy covered call core that got me here. I still believe in it.

30% in State Street sector diversification

This is where I’d start building a broader non-tech sleeve using a mix of funds like:

• XLUI

• XLVI

• XLSI

• XLEI

• XLBI

• maybe XLII depending on the environment

20% in alternatives / defensive hedges

This would be my shock absorber layer—other defensive positions, tactical holdings, or hedges that help balance the rest of the portfolio.

That’s not a recommendation. It’s just the kind of architecture I’d be exploring if I decided I wanted to intentionally reduce concentration without giving up income.

How This Could Behave in Different Market Scenarios

What I like about this framework is that it gives me a way to think through multiple outcomes instead of betting everything on one.

Scenario 1: Soft Landing / Moderate Growth

If tech underperforms a little but the economy stays okay, industrials could rally, energy might hold up, and utilities may soften slightly. A diversified income portfolio would probably stay flat to positive, with distributions doing a lot of the heavy lifting.

Scenario 2: Tech Correction

If the Nasdaq gets hit 15% to 20%, my current portfolio would feel that hard because so much of it is tied to tech. In a more diversified structure, healthcare, staples, and utilities could cushion the blow while energy or real estate might behave differently. That doesn’t eliminate downside, but it changes the shape of it.

Scenario 3: Inflation / Geopolitical Shock

If oil spikes or supply chains tighten, energy and materials could outperform while tech struggles. That kind of diversification matters if you’re trying to keep income flowing across multiple environments.

Scenario 4: Recession

If everything sells off, defensive sectors probably still fall—but likely less than the cyclical ones. Utilities, healthcare, and staples aren’t magic, but they’re a different kind of employee in the portfolio. And if they’re still paying distributions while prices are lower, that creates reinvestment opportunities too.

That’s the key for me. I’m not trying to predict which scenario happens. I’m trying to understand whether I want a portfolio that can survive more than one kind of environment.

What I’m Actually Doing Right Now

Right now, I’m not overhauling the portfolio.

I’m testing.

I’ve started small positions in XLUI, XLEI, and XLBI because I want to watch how they behave in real time—how stable the distributions are, how correlated they are to my existing holdings, and how they act when markets get messy.

If they hold up well over the rest of the year, I could see myself expanding into maybe six or seven of these funds over time. Not all 11. Not all at once. Just enough to create real diversification without abandoning my conviction in tech.

If I were deploying fresh capital today, I’d probably build it slowly:

• Start with one fund

• Live with it for a month

• Add another

• Watch the distributions

• Watch the correlation

• Learn how it behaves

• Then decide whether it deserves a bigger role

That’s how I’d do it. Not with a giant overnight rotation. With deliberate, incremental testing.

One Important Reality Check: Taxes

Before anyone gets too excited about a 16%, 20%, or 27% yield, there’s one thing worth remembering:

These distributions are generally taxed as ordinary income.

That matters.

If you’re holding these in a taxable account and you’re in a high bracket, your after-tax yield is going to be a lot lower than the headline number. A 16% yield can turn into something much smaller after federal and state taxes.

That doesn’t mean the strategy is bad. It just means you need to know what you’re actually keeping.

This is one reason why these kinds of funds can make a lot more sense inside IRAs, 401(k)s, and other tax-advantaged accounts, where the full distribution can compound without getting clipped every year.

For me, that tax reality doesn’t kill the idea. It just means I need to keep expectations grounded and think carefully about where I hold these kinds of funds.

Where I Land Right Now

I’m still a tech guy. I’m still bullish on tech. I still think QQQI and SPYI deserve to be at the center of my portfolio.

But now I also know something I didn’t have before:

If I want to diversify without giving up income, I finally have a framework that makes sense.

State Street’s sector premium income ETFs don’t automatically solve every problem. They’re not magic. They’re not tax-free. They’re not risk-free. But they do give me something valuable: a clean way to start thinking about diversification by sector while staying inside an income-focused system.

So for now, I’m watching. Testing. Thinking through how much diversification I actually want, how much yield I’m willing to trade for stability, and which sectors I’d want working for me if tech finally hit a rough patch.

And honestly, that’s the real point of this whole exercise.

Not to make a snap decision.

Just to understand what’s possible before I need it.