Opinions
Mike Philbrick
Global X NASDAQ 100 Covered Call ETF
QYLD-Q
BUY ON WEAKNESS
Apr 03, 2023
$17.185
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
Limits upside potential with covered call protection
Good defensive name.
Lower volatility.