Opinions
Larry Berman CFA, CMT, CTA
Global X NASDAQ 100 Covered Call ETF
QYLD-Q
PARTIAL BUY
Aug 23, 2021
If you are aggressive, then you do not want this since it gives up upside. However, for a defensive play, you should have this in your portfolio. The enhanced yield will give you a slightly bigger return if there is a sell off. However, it does not protect you from dowside.
$22.865
Stock price when the opinion was issued
E.T.F.'s
It's the ideal tool to help you make quicker, more informed decisions for
managing and tracking your investments.
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COMMENT
DON'T BUY
Enhanced dividend yield of 12%. Total return over the last 3 years was 5.68% vs. 59% for the NASDAQ 100. YTD, down 17%, vs. the NASDAQ down 24%, so you can see how the covered call strategy works in a falling market. But long term, stocks tend to move higher, not lower. Paying a higher management fee for covered calls, about 60 bps for this one. You can buy a NASDAQ 100 index much cheaper.
E.T.F.'s
DON'T BUY
Warning flags. US-based product. Never trust yield. Covered calls on this product don't get the favourable capital gains treatment. It might be OK in an RRSP, RRIF, or RESP, but not in a TFSA. You're not hitting the sweet spot of favourable tax treatment.
Doesn't like writing covered calls on stuff that's very volatile, such as NASDAQ, gold, or oils.
E.T.F.'s