QUSA ETF Review — 15% Yield from Quality Stocks 2025

Revolutionary Income Strategy Meets Quality Factor Investing

The VistaShares Target 15™ USA Quality Income ETF (QUSA) represents a groundbreaking approach to income investing, becoming the first ETF to combine factor investing with an actively managed options overlay targeting a remarkable 15% annual yield. This innovative fund merges quality stock selection with sophisticated covered call strategies to deliver consistent monthly income while maintaining exposure to financially robust companies.

For income-focused investors seeking alternatives to traditional dividend strategies, QUSA offers a compelling proposition through its unique blend of quality equity exposure and options-based income generation. Follow my Dividend Growth Portfolio for more insights on building sustainable income streams.

QUSA ETF price performance chart showing daily closing prices from inception in May 2025 through October 2025

Fund Structure and Investment Strategy

QUSA operates through a dual-component strategy that sets it apart from conventional covered call ETFs. The fund maintains a portfolio of approximately 27 quality U.S. equities, despite the fact sheet listing 50 holdings — the difference accounting for options positions overlaid on the equity holdings.

Quality Factor Methodology

The fund’s quality screening process focuses on three critical financial metrics:

High Return on Equity (ROE) — Reflecting efficient management and strong profitability relative to shareholders’ equity

Low Debt-to-Equity Ratios — Indicating prudent leverage usage and financial stability

Low Earnings Variability — Ensuring consistent and predictable earnings streams over time

This rigorous selection process has resulted in a concentrated portfolio of financially robust companies, including blue-chip names like Microsoft, Visa, Mastercard, and Procter & Gamble.

Options Overlay Strategy

QUSA employs multiple options strategies with 100% portfolio coverage to maximize income generation. The fund manager utilizes seven distinct strategies:

• Selling covered calls
• Credit spread sales
• Diagonal call spreads
• Cash-secured put selling
• Calendar call spreads
• Collar strategies with supplemental approaches

The fund primarily writes out-of-the-money calls, which provide lower premiums but allow greater participation in market upside compared to at-the-money strategies. This approach has proven effective for similar ETFs like JEPI and JEPQ in bullish market conditions.

Performance Analysis and Key Metrics

Since inception in May 2025, QUSA has demonstrated the typical characteristics of covered call ETFs with moderate volatility and consistent income distribution. The fund currently trades at approximately $19.54, representing a -2.30% total return from its $20.00 inception price.

Income Distribution Profile

QUSA has maintained its targeted monthly distribution schedule with payments averaging approximately $0.25 per share, translating to the targeted 15% annual yield. Recent monthly distributions include:

• September 2025: $0.24575 per share (1.25% monthly rate)
• August 2025: $0.25188 per share
• July 2025: $0.25450 per share
• June 2025: $0.25050 per share

The fund’s 30-day SEC yield of 0.67% reflects the actual dividend income from underlying holdings, while the 15% distribution rate comes primarily from options premiums.

Risk Considerations

Like all high-yield covered call strategies, QUSA faces the risk of NAV erosion if distributions exceed actual returns. The fund’s expense ratio of 0.95% is competitive within the covered call ETF space, though higher than traditional index funds.

Investors should monitor the fund’s ability to grow NAV over time to ensure sustainable distributions. The annualized volatility of 9.21% demonstrates relatively stable price movements compared to broader market indices.

For comprehensive analysis of dividend-focused strategies, explore my Dividend Growth Portfolio research.

Sector Allocation and Holdings Quality

QUSA maintains diversified exposure across quality sectors, with significant allocations to Industrials (29.3%), Financials (26.2%), and Information Technology (21.5%). This balanced approach provides stability while capturing growth opportunities across multiple economic sectors.

The fund’s top holdings represent established market leaders with strong competitive moats and consistent cash flows. Oracle Corporation leads with an 8.06% weighting, followed by General Dynamics (5.66%) and Fastenal (5.15%).

Tax Implications and Account Considerations

QUSA distributions are generally taxable as ordinary income, qualified dividend income, or capital gains. The options premium component typically receives ordinary income treatment, making tax-advantaged accounts like IRAs particularly suitable for this strategy.

The monthly distribution schedule provides regular cash flow for retirees and income-focused investors, though the tax efficiency may be lower compared to qualified dividend strategies in taxable accounts.

Competitive Positioning

Within the covered call ETF universe, QUSA differentiates itself through quality factor selection rather than broad market exposure. While funds like JEPI focus on low-volatility large-caps and QYLD tracks the NASDAQ-100, QUSA specifically targets companies with superior financial metrics.

The fund competes directly with Vista Shares’ other offering, OMAH, which applies similar options strategies to Berkshire Hathaway holdings. OMAH has attracted $134 million in assets under management since launch, indicating strong investor appetite for Vista Shares’ Target 15™ approach.

Stay updated with my latest analysis by following my Dividend Growth Portfolio.

Investment Suitability

QUSA appeals primarily to income-focused investors seeking aggressive yield generation from quality equity exposure. The fund suits investors who:

• Prioritize current income over capital appreciation
• Understand covered call strategy limitations
• Seek exposure to quality companies with options overlay
• Can utilize tax-advantaged accounts for income strategies

The fund may not suit growth-oriented investors or those seeking maximum capital appreciation, as the options overlay caps upside participation above strike prices.

Conclusion

QUSA represents an innovative approach to income investing, successfully combining quality factor selection with sophisticated options strategies to target 15% annual yields. While the fund’s brief operating history limits long-term performance assessment, its systematic approach to quality stock selection and professional options management positions it favorably within the covered call ETF landscape.

The fund’s focus on financially robust companies with consistent earnings provides a solid foundation for sustainable income generation, though investors must carefully consider the trade-offs between current income and potential capital appreciation.

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