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QYLG vs QYLD: A 3-year comparison

QYLG and QYLD are two popular exchange-traded funds (ETFs) that invest in the Nasdaq 100 Index, but with different strategies. QYLD sells covered calls on 100% of its portfolio, while QYLG sells covered calls on only 50% of its portfolio. This means that QYLG has the potential to generate both growth and yield, while QYLD is primarily a yield-generating ETF.

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Performance comparison

Over the past 3 years, QYLG has outperformed QYLD in terms of both total return and annualized return.



$QYLG vs. $QYLD YTD GROWTH

$QYLG: +23.3% From January 2023 To November 3rd 2023 (YTD)

$QYLD: +7.2% From January 2023 To November 3rd 2023 (YTD)


Why QYLD only goes down

QYLD is a covered call ETF, which means that it sells calls on its underlying stocks. When the stock price goes up above the strike price of the call option, the option is exercised and the ETF sells the stock. This means that QYLD cannot participate in the full upside of the Nasdaq 100 Index.


QYLD also sells covered calls at the money, which means that the strike price of the call option is equal to the current stock price. This means that QYLD is more likely to have its options exercised, which further limits its upside potential. QYLD may not be able to fully recover after a bear market cycle. This is because QYLD sells covered calls at the money, which means that it cannot participate in the full upside of the Nasdaq 100 Index. If the Nasdaq 100 Index experiences a prolonged bear market, QYLD may not be able to fully recover its losses.


QYLG: A better balance of growth and yield

QYLG sells covered calls on only 50% of its portfolio, which allows it to participate in the upside of the Nasdaq 100 Index, while also generating yield from the covered calls. This makes QYLG a better choice for investors who want a balance of growth and yield.


Example

If you had invested $10,000 in QYLG 3 years ago, your investment would be worth $15,852.42 today (including yield reinvested). If you had invested $10,000 in QYLD 3 years ago, your investment would be worth $14,413.55 today (including yield reinvested).


Conclusion

QYLG is a better choice for investors who want a balance of growth and yield. It has outperformed QYLD in terms of both total return and annualized return over the past 3 years. QYLD only goes down because it sells covered calls at the money, which limits its upside potential. QYLG, on the other hand, sells covered calls on only 50% of its portfolio, which allows it to participate in the upside of the Nasdaq 100 Index.


Disclaimer: This is not financial advice. Please consult with a qualified financial advisor before making any investment decisions. ZTRADEZ is the best place to learn how to trade stocks, options, and futures with confidence, join us here. https://discord.gg/optionstrading

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