JEPI - QYLD: Opportunity Cost May Not Outweigh The 11.55% Yield For Income Investors
2024-04-10 09:00:00 ET
Summary
- QYLD is a covered call ETF that underperformed the S&P 500 index fund in 2024.
- QYLD's strategy focuses on generating income rather than capital appreciation.
- QYLD has consistently distributed monthly income and may be attractive for income-focused investors.
The Global X NASDAQ 100 Covered Call ETF ( QYLD ) is often regarded as the fund that pushed the covered call overlay income strategy into the spotlight. QYLD is the flagship covered call ETF from Global X with $8.15 billion in assets under management ((AUM)). QYLD hit the market at the end of 2013, and as its popularity grew, other fund administrators launched their spin on the option overlay strategy. Some of the most popular are the JPMorgan Equity Premium Income ETF ( JEPI ), which has $33.45 billion in AUM, and the Amplify CWP Enhanced Dividend Income ETF ( DIVO ). QYLD, JEPI, and DIVO have different strategies, and without taking the income generated into consideration, they have all underperformed a standard S&P 500 index fund such as the SPDR S&P 500 ETF Trust ( SPY ). ETFs such as QYLD aren’t for everyone as their focus is not capital appreciation, and after going through the data, its strategy and results could outweigh the opportunity cost for lost appreciation. I believe QYLD’s strategy still holds up for income investors and will go through the data in this article....
QYLD: Opportunity Cost May Not Outweigh The 11.55% Yield For Income Investors