Horizons NASDAQ-100 Price, Forecast, Insider, Ratings, Fundamentals & Signals

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.

Global X NASDAQ 100 Covered Call ETF has gained popularity among investors for its covered-call strategy. However, the current dividend yield of ~11.6% may not be sufficient to compensate for the downside risks. The current option premium is relatively low (because of the low implied volatility) while downside risk is high given the elevated P/E of the Nasdaq index.

Covered call ETFs, such as QYLD, have provided stable income for dividend investors despite market challenges. QYLD focuses on offering consistent income rather than maximizing total returns. QYLD is expected to perform well in a market with elevated volatility levels.

Investors interested in options income have many choices, including two popular funds, QYLD and QQQY. This article assesses the strategy of each fund, including their methodology and composition. It also looks at the differences between the two trades, calls vs puts, and analyses which is more efficient for generating income.

The Global X Nasdaq 100 Covered Call ETF has consistently lagged behind the Nasdaq-100 index in terms of performance. The current dividend yield of QYLD has dropped, making it less attractive for investors. However, QYLD offers a high dividend yield of ~11.5% and lower volatility compared to the index, making it a solid choice for yield-seeking investors.

The Nasdaq 100 had a strong year in 2023, with a 55% increase, but its dividend yield is only around 1%. Income investors can invest in Nasdaq 100-based funds that sell covered calls to generate income. The Global X Nasdaq 100 Covered Call ETF, Nuveen Nasdaq 100 Dynamic Overwrite Fund, and Global X Nasdaq 100 Covered Call & Growth ETF are popular funds that use this strategy.

The mega-cap Tech-heavy Nasdaq 100 is up nearly 1% today as of this writing, which leaves it up 4.5% already in 2024. The Nasdaq 100 is now up 64% during its current bull market that began on 12/28/22.

A Look At The Boom In Income Focused Nasdaq ETFs

Total Return is the actual rate of return for an investment over a given evaluation period, typically one, three, five, or ten years. The Total NAV Return is the sum of all dividends/distributions, assuming they are reinvested, plus the change in the NAV of the fund, be it positive or negative. However, managing our portfolio is not only about applying financial rules, because it is not certain that dividends can and will always be reinvested.

QYLD: 2023's Tech Bull Run Left This Covered Call Strategy In The Dust