JEPQ - QYLD: Consider JEPQ As An Alternative
2024-05-02 23:59:37 ET
Summary
- QYLD ETF writes ATM call options on the Nasdaq 100 Index to generate high distribution yields.
- The Fund has underperformed because it trades off all of the index's upside.
- Instead of QYLD, investors may want to consider the JEPQ, which also writes call options on the Nasdaq 100 Index, but sells OTM calls and retains some upside.
Last summer, I wrote a cautious follow-up article on the Global X NASDAQ 100 Covered Call ETF ( QYLD ). In my opinion, on any reasonably long time frame, QYLD's strategy will likely underperform the passive Invesco QQQ ETF ( QQQ ) in delivering total returns, since markets trend up and the QYLD ETF trades off upside returns for premium income....
QYLD: Consider JEPQ As An Alternative