XYLD - XYLD: A 30-Year Lookback On The S&P 500 Covered Call Strategy
- XYLD is a S&P 500 Covered Call ETF that's currently yielding 8.98%.
- Investors may be spooked by its recent poor performance relative to the S&P 500, but there are many reasons to believe this is unlikely to repeat.
- First, XYLD has changed benchmarks twice in the last four years. Second, Vanguard's ten-year projections for equities are modest at best. And third, 30-years of history suggest otherwise.
- I estimate XYLD's break-even point to be a 1.5% gain for the S&P 500, and given today's uncertain environment, investors are more likely to pocket the premiums rather than sacrifice upside.
For further details see:
XYLD: A 30-Year Lookback On The S&P 500 Covered Call Strategy