Hello, I want to show some evidence that qyld isn’t a good long term option and why qqqx is a better place to put your money over the long term.
This top chart is qyld since 2014 and the bottom is qqqx since 2008. Notice a difference in stock price?
So why is it that qyld is a depreciating asset well its because how the fund works. Every month is sells an atm call on every single stock in the nasdaq, returns the dividend to shareholders, then re buys every stock. By doing this they allow no room for stock price growth any stock that goes up immediately gets called away for minimal gains.
Qqqx on the other hand doesn’t sell atm calls on every single stock, they only select certain ones so they can create a balance between returning profits form sold covered calls and also allowing for stock price growth.
Qyld pays a 12% annual yield with monthly dividend vs qqqx pays 7.9% annual dividend with quarterly dividends. Qyld does pay out more and more often but your kneecapping your chance at growth.
I do own some xyld which is the s&p version of qyld but I am starting to favor qqqx as a better long term investment with the added benefit of getting dividend from call writing. I am looking to slowly add to qqqx until it is a larger percentage then xyld is in my portfolio.
Don’t get me wrong I think qyld can have a place in your portfolio but do keep in mind how the fund works. My personal opinion is that if your reinvesting dividends and 10-20 year long term qqqx is going to be a better snowball then qyld and worth investing in for younger folks.