Forget SCHD? This New ETF Could Be the Future of Monthly Income

Dividend ETFs have long been a go‑to for income‑focused investors. Take the Schwab U.S. Dividend Equity ETF (SCHD). This popular ETF  yields a steady 3.75%, pays quarterly and tracks dozens of high‑quality U.S. stocks with solid fundamentals. Top holdings include stocks like ConocoPhillips, Chevron, Verizon Communications, Coca-Cola and Altria Group. In addition to exposure to blue-chip stocks, investors can expect few surprises, low fees of 0.06% and nearly $72 billion in assets under management, making SCHD the reliable vanilla choice of monthly income portfolios.

If  you’ve got room in your portfolio for something a bit more dynamic, we’d like to introduce the VistaShares Target 15 Berkshire Select Income ETF (OMAH). Launched in Q1 2025, OMAH blends the stability of Berkshire Hathaway’s core holdings, like Apple, Coca‑Cola and Berkshire Hathaway, with a sophisticated covered‑call strategy targeting a 15% annualized yield, paid monthly. That’s a dramatic leap from SCHD’s comparatively modest payout, and it gives investors the opportunity to invest like a billionaire. 

At 0.95%, OMAH charges a higher expense ratio compared with SCHD, and its options overlay limits the upside potential. While it’s pricier, these features are what enable the fund to execute a covered-call strategy designed to generate that compelling monthly income. Investors seeking steady monthly income in a volatile market may prefer OMAH’s robust yield, especially given its $356 million in AUM and rapid growth since launch .

If your priority is consistent, enhanced income and you’re willing to embrace a more complex strategy, OMAH offers a fresh and potentially more rewarding alternative to traditional dividend ETFs like SCHD.

OMAH and The Oracle of Omaha 

OMAH isn’t your average dividend ETF. It builds its base on an equity lineup that reflects the top 20 holdings in Berkshire Hathaway, directly holding shares like Apple, American Express, Coca-Cola, Bank of America and, of course, Berkshire Hathaway itself. As of May 30, 2025, those core positions comprised over three-quarters of the fund’s total assets, offering investors exposure to well-capitalized, blue-chip companies that have become almost synonymous with Warren Buffett’s investing legacy. 

But OMAH doesn’t stop there. Alongside its stock foundation is a data-driven covered-call strategy, the method by which OMAH aims to hit its headline target of a 15% annualized yield, paid monthly. According to VistaShares, this professional-grade options approach is designed to drive income without sacrificing the quality of the underlying stocks. 

According to the VistaShares factsheet, distributions in March through June averaged around $0.24 per share, translating to a 1.25% monthly payout and reinforcing the 15% distribution rate. However, the fund also discloses that about 95.8% of that payout is classified as a return of capital, highlighting that much of the income is generated from options premiums rather than traditional dividends. 

In essence, OMAH offers a hybrid income strategy involving equity exposure tied to Buffett‑style names, plus a sophisticated options overlay designed to deliver attractive monthly cash flow. This combination can bolster yields, but investors should remember that much of the payout originates from options income rather than the redistribution of corporate profits. But at the end of the day, money is money. 

OMAH Could Be the Future of Monthly Income

OMAH represents a fresh twist on the income game. The fund builds its foundation with Berkshire Hathaway-style heavyweights—Apple, American Express, Coca-Cola, and more—making up over 80% of its holdings as of May 2025. But what really sets it apart is the covered‑call layer, a strategy that aims to hit that bold 15% annual yield and delivers income every month. 

That matters right now. Conventional dividend ETFs like SCHD typically yield around 3%-4% and pay quarterly. OMAH, however, seeks significantly higher, more frequent payouts by capturing covered‑call premiums, even when markets are flat or dipping. 

Since its launch in early 2025, the ETF has already attracted about $358.04 million in assets under management, signaling serious interest from investors. Its payouts, averaging around $0.24 per share monthly, are on track to hit that 15% target. But here’s the catch: nearly 96% of those distributions are classified as return of capital, meaning they come mostly from option premiums—not dividends. This innovative approach could thrust this hybrid dividends/options model into the spotlight for other ETF strategies to emulate. 

Of course, nothing’s perfect. The covered‑call setup limits upside potential, and OMAH’s 0.95% expense ratio is unavoidable higher than that of typical dividend ETFs. Yet in a low‑yield, high-volatility environment, this hybrid model offers a compelling alternative, blending blue‑chip stability with steady, high-yield income. For investors seeking dependable monthly payouts without jumping into high-risk plays, OMAH might just represent the next wave in dividend investing.

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