XYLD - PBP: As With Many Covered Call ETFs The Sales Pitch Exceeds The Value
Summary
- For decades, brokers, advisors, and more recently, ETF providers have touted "covered call writing" as an investment strategy.
- In many cases, such as with PBP, the attraction of a "higher yield" is offset by a simple fact: these ETFs don't add enough value to merit owning them.
- Investors are at risk of experiencing "delayed sticker shock" when they figure out that their big income yield is essentially being offset by principal loss.
- PBP and its peers are not all bad. But there are many other ways to pursue income in modern markets.
- PBP gets a Sell opinion from us.
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PBP: As With Many Covered Call ETFs, The Sales Pitch Exceeds The Value