Global X NASDAQ 100 Covered Call ETF [QYLD] Stock Forecast

In this article, we discuss how we deployed covered call strategies and how it differs from QYLD's income-generating strategies. Our case against QYLD is expecting yield from the Tech sector, structurally declining QYLD price, risk of detaching from NAV, and better prospects from blue-chip value dividend stocks.

QYLD is now yielding over 16% from its covered call strategy as its fallen to a level below its pandemic lows. QYLD isn't an investment for capital appreciation, but as an income investment, QYLD has generated a positive ROI between its distributions and share value over time.

QYLD has outperformed its index YTD, due to its strong, fully-covered 13.3% dividend yield. QYLD should underperform once equity markets recover.

International stocks and covered-call ETFs offer higher yields to investors willing to take on risk.

I reevaluate an investment in QYLD since the beginning of 2021 and 2022 to see how it has performed. QYLD has slightly outperformed QQQ in 2022 but has significantly underperformed QQQ since the beginning of 2021.

The Global X Funds - Global X NASDAQ 100 Covered Call ETF offers a hefty double-digit income yield, made possible by its unique approach of selling covered NASDAQ calls. The strategy limits QYLD's appreciation potential severely, however. QQQ has been a better total return pick despite a much lower yield.

The Global X NASDAQ 100 Covered Call ETF (QYLD) and JPMorgan Equity Premium Income ETF (JEPI) both use a covered-call strategy to generate attractive dividends. The strategy has generated reliable dividends far exceeding inflation in the past.

The QYLD ETF writes covered calls on the Nasdaq 100. It pays monthly and yields ~12%.

The Global X Nasdaq 100 Covered Call ETF aims to sell calls against its underlying Nasdaq 100 holdings to generate income for investors. The 12% distribution yield is greatly misleading, as a significant portion of the distribution is often a return of capital, rather than actual capital gains or investment income.

QYLD is a fantastic income-oriented fund. QYLD has outperformed this year, as I said it would back in January.