Great review of QQQI, thanks! I have a significant position in both SPYI & QQQI and am looking forward to their Russell 2000 version, as a guess - IWMI - as well.
Great info. I have considered QQQI and will likely invest in the future, but would like to see the fund operate for a little longer. THANKS for reviewing it.
Thanks Dave, you always do a good job! I have positions in SPYI and QQQI as well as JEPI and JEPQ. I am expecting the dividend to decrease if volatility decreases, but I hope to hold on!
Wouldn't you be happier buying 2 weeks before ex-date, since the funds will pull back a bit the day after? Anyway, I am a buyer too. I have been trying to sell calls on SPY, but every time I do, it runs up and away, and I have to scramble. Hoping these pros can help me out with making covered calls work. Thanks
Dave, nice one, thank you. Would you consider doing a video comparing safety and stability of these funds in terms of market correction/collapse? Which one of these would likely fare better. It would be interesting to see how such simulation would work?
Is that from the 19As or your 1099? The 19A statements are not accurate and just an estimate. I only owned it for part of the year and I ended up around 70%.
FYI return of capital is NOT return of principal. Big difference, actually. Return of capital is merely an accounting term used for tax efficiency purposes.
@@chrisarntz8556 yes that should be about $.60 a share per month for QQQI and $.50 per share per month for SPYI. Plus the return of capital provision at tax time.
Have put a significant portion of my 401k in both SPYI and QQQI. Will be watching the fund’s covered call strategy closely. I often write calls against my other positions in my IRA and cash accounts so when I came across this fund I understood the strategy right away. So far so good. Was expecting to see much larger call covered call positions against 1 billion but will watch to see how that changes over time. Great review.
I have some SPYI and want to start buying QQQI but my brokerage (tastytrade) has QQQI currently set to closing only, so, I can't. Maybe when QQQI has more AUM they'll allow it.
Question: In a down market are you better off with these type of ETF's or just sitting on the side earning the guaranteed 3 month T-bill rates as of today. Just looking for the best place to park money in a down market. I should clarify I like the idea of selling options I just don't want to do it my self and I am looking for ETF's that will beat the T-Bill rate. I will also using a IRA account which is also tax sheltered and will not be taxed until it is with drawn.
Depends on how much of a down market you're considering. T-bill ETF ($BIL or $SGOV) currently earns ~5%. I looked at the 2022 performance of a bunch of covered call ETFs (DIVO, JEPI, NUSI, QYLD). They all had negative total return. DIVO and JEPI did the best and had a total return of -1.5% and -3% respectively. I'm invested in DIVO, JEPI and JEPQ. I think NUSI and QYLD are junk.
I'm not an options trader... but how can CC covering about the same sector have such different yields. JEPQ 9.5%... QQQI 15%.... FEPI 25%. How can FEPI payout so much or QQQI pay so little? Can you "test" the contracts that they are really making 15% on assets (or 25% for FEPI). if it is so easy for FEPI, why can't QQQI and JEPQ yield 25%?
FEPI is only based on a few stocks that have high IV. That drives a higher premium and a higher distribution. That will also (likely) be reflected in any sort of correction that may occur. That is, it will have a bumpy ride! JEPQ and QQQI will be similar but their option strategy will be different and results will vary. For example, how are out of the money they sell their strikes would be a factor. Further OTM allows for more upside participation but reduces your premiums from the options. Closer reduces your upside but brings in larger premiums.
@@wealthadventures i thought all these options are between 2%-4.5% out of the money, with contracts about 4 to 8 weeks out. I thought all three of these have essentially the FANG stocks plus hi vols. Do you really think there is up to 1500 basis point difference in these strategies? If its valid, that would make a great video... if it's fishy, then it'll make a better video.
Hey Dave can you shine some light on capital erosion as a risk with covered call etfs. I see this come up a lot for these types of ETFs but I don’t quite understand how it works. Is the essence that the number of shares that I buy today might decrease overall in the future if the volatility or market goes down?
Hi. Another person asked above so going with that again... There should not be an issue with the NAV but the concern is a whipsaw move. For example, the index plummets down 20% one month and back up 20% the next. If you just own the stock, no issue. If you sell a call, you get that gain month 1 but during month 2 you can "lock in the loss" with the call being sold limiting your gain. Make sense?
@@wealthadventures To be honest I am still lost on the last part. Not sure what “lock in the loss” means. Perhaps you can make a video about this whipsaw scenario
@@trqrider94 I can work on a video. With QQQI or other covered call ETFs, they sell a strike price that is above the current stock price. They collect a premium for doing this but if the stock (index) takes off and goes past the strike price, they do not participate any longer in the gain of the stock. It is limited by that strike price. If the stock plummets the next month back to the original value, you may have a loss despite the stock price being the same. I'll work on a video.
What’s your thought on an equal weight portfolio made up of QQQI + SPYI 20% BND 20% DGRW (or DGRO) 20% SCHG (or VUG) 20% VOO 20%. Would this create a decent risk adjusted portfolio Baby daddy @0:10 😂😂😂
So the ROC distributions reduce your cost basis but make it such that the income received is taxed more efficiently.. you're pretty much trading the tax 'savings' on distributions for a reduction in your cost basis? At the end of the day if you decide to sell the fund you'd likely be selling at a loss due to the reduction in cost basis which in a way is the "tax" you would have otherwise paid had the distributions not been classified as ROC. Is my logic correct here?
The perk in my opinion is that if you hold it for over a year, you will be able to sell it and realize a long term gain instead of a short term gain. The ROC sheltered you from much of the short term gain. Not tax advice!
SPYI and especially QQQI are both too new for me. Also, I think these belong in a taxable account for people that are within 1 year or so before retirement, and I'm not there yet.
My largest holdings in this area are JEPI, JEPQ, and DIVO. I think QQQI and SPYI are good options. SPYI has performed well but I only have a small position.
Yes. Same setup. I take it you are not a fan? It does allow you to reduce tax burden in the current year so that gains can become long term gains vs short term. However, not receiving anything is the best tax solution.
@@bonanzatime Not tax advice!... But ROC will adjust your basis. So if you invest $10,000 and get paid $800 of ROC this year, you would have an adjusted basis of $9200. If you were to sell the stock, you would have to pay tax on that $800. Nice perk is that if you hold the stock for over 1 year, it would become a long term gain.
so I bought some today.. 5000 shares.. So tomorrow is EXDATE. so since I bought before EXDATE Im in for the DIVY right ? So can I see tomorrow or the next day and still get the DIVY !!! I might hold it too... QQQ looks like its going to run up still to the highs
If you own shares prior to the Ex-Date, you get the dividend/distribution. Just be aware, the distribution will drop the value of the fund by the amount distributed. Plus you may have tax to pay on the distribution.
I always appreciate the humor you inject into your videos! 😁👍🏼
Thanks!
Thanks for illustrating the option trades. Nice QQQI overview 👍🏼😀
Thank you sir!
Great review of QQQI, thanks! I have a significant position in both SPYI & QQQI and am looking forward to their Russell 2000 version, as a guess - IWMI - as well.
It shouldn't be too long.
Thank you for your time, sir. It is appreciated!
Great info. I have considered QQQI and will likely invest in the future, but would like to see the fund operate for a little longer. THANKS for reviewing it.
Welcome! Thanks for watching.
Thanks Dave, you always do a good job! I have positions in SPYI and QQQI as well as JEPI and JEPQ. I am expecting the dividend to decrease if volatility decreases, but I hope to hold on!
Thanks! Volatility is low but this past week moved it higher a bit.
I have both SPYI and QQQI - very happy with them. The tax benefits are unique and extremely helpful.
what are the tax benefits ?
I buy 25 shares of SPYI and QQQI every month on their exdividend date.
Smart and good for you!
Wouldn't you be happier buying 2 weeks before ex-date, since the funds will pull back a bit the day after? Anyway, I am a buyer too. I have been trying to sell calls on SPY, but every time I do, it runs up and away, and I have to scramble. Hoping these pros can help me out with making covered calls work. Thanks
Interesting strategy to buy on xdiv date. I like it.
Thanks as always Dave. You make QQQI’ing fun. Not sure what that means but it feels slightly inappropriate, therefore funny (to me). 😊
Ha! Thanks.
Dave, nice one, thank you. Would you consider doing a video comparing safety and stability of these funds in terms of market correction/collapse? Which one of these would likely fare better. It would be interesting to see how such simulation would work?
Sure. Let me think about it.
I owe SPYI, loved the returns and tax treatment during tax season and now I am building QQQI
Actually SPYI is 93% return of capital in 2023 and for the first 2 months of QQQI is 97% return of capital. What a deal! I own a bunch of each!
Is that from the 19As or your 1099? The 19A statements are not accurate and just an estimate. I only owned it for part of the year and I ended up around 70%.
FYI return of capital is NOT return of principal. Big difference, actually. Return of capital is merely an accounting term used for tax efficiency purposes.
Hey so I bought qqqi today (the day before EXDATE.. So I bought 5000 shares so will I get (5000 X 0.14) / 12 in a couple of days I read.. right ?
@@chrisarntz8556 yes that should be about $.60 a share per month for QQQI and $.50 per share per month for SPYI. Plus the return of capital provision at tax time.
@@wealthadventures yes, me too wondering about ROC!!, can you please do a deeper dive into this please?
Dave, I own them both, and I am watching for what NEOS comes out with next. Ask them about future offers and let us know please if you can.
Will do! I know they have some in the pipeline.
I heard they coming out with IWMI next!
The first part of the word "fund" is fun. I just thought I would point that out because I only make really profound comments.
I like it!
I own them both & looking to add more in all of my accounts
Have put a significant portion of my 401k in both SPYI and QQQI. Will be watching the fund’s covered call strategy closely. I often write calls against my other positions in my IRA and cash accounts so when I came across this fund I understood the strategy right away. So far so good. Was expecting to see much larger call covered call positions against 1 billion but will watch to see how that changes over time. Great review.
Started a position in QQQI today 30 shares in my ROTH
Nice! Good luck.
On my to do list to buy Monday - I’m addicted to monthly dividend 😂😂😂
Started building a position in both over the last few months.
Good luck!
I don’t know what is special about these funds. They don’t beat JEPQ or XYLD in total return.
I have some SPYI and want to start buying QQQI but my brokerage (tastytrade) has QQQI currently set to closing only, so, I can't. Maybe when QQQI has more AUM they'll allow it.
Probably right. It might just be a matter of time.
Question: In a down market are you better off with these type of ETF's or just sitting on the side earning the guaranteed 3 month T-bill rates as of today.
Just looking for the best place to park money in a down market.
I should clarify I like the idea of selling options I just don't want to do it my self and I am looking for ETF's that will beat the T-Bill rate.
I will also using a IRA account which is also tax sheltered and will not be taxed until it is with drawn.
I am invested in this etfs , you have more risk, but more upside also and if you reinvest the dividend it works fatser
Depends on how much of a down market you're considering. T-bill ETF ($BIL or $SGOV) currently earns ~5%. I looked at the 2022 performance of a bunch of covered call ETFs (DIVO, JEPI, NUSI, QYLD). They all had negative total return. DIVO and JEPI did the best and had a total return of -1.5% and -3% respectively. I'm invested in DIVO, JEPI and JEPQ. I think NUSI and QYLD are junk.
Sgov
You would be better in cash if the market pulls back but these should outperform with time IMO.
I'm not an options trader... but how can CC covering about the same sector have such different yields. JEPQ 9.5%... QQQI 15%.... FEPI 25%. How can FEPI payout so much or QQQI pay so little? Can you "test" the contracts that they are really making 15% on assets (or 25% for FEPI). if it is so easy for FEPI, why can't QQQI and JEPQ yield 25%?
FEPI is only based on a few stocks that have high IV. That drives a higher premium and a higher distribution. That will also (likely) be reflected in any sort of correction that may occur. That is, it will have a bumpy ride! JEPQ and QQQI will be similar but their option strategy will be different and results will vary. For example, how are out of the money they sell their strikes would be a factor. Further OTM allows for more upside participation but reduces your premiums from the options. Closer reduces your upside but brings in larger premiums.
@@wealthadventures i thought all these options are between 2%-4.5% out of the money, with contracts about 4 to 8 weeks out. I thought all three of these have essentially the FANG stocks plus hi vols. Do you really think there is up to 1500 basis point difference in these strategies? If its valid, that would make a great video... if it's fishy, then it'll make a better video.
Hey Dave can you shine some light on capital erosion as a risk with covered call etfs. I see this come up a lot for these types of ETFs but I don’t quite understand how it works. Is the essence that the number of shares that I buy today might decrease overall in the future if the volatility or market goes down?
Hi. Another person asked above so going with that again...
There should not be an issue with the NAV but the concern is a whipsaw move. For example, the index plummets down 20% one month and back up 20% the next. If you just own the stock, no issue. If you sell a call, you get that gain month 1 but during month 2 you can "lock in the loss" with the call being sold limiting your gain. Make sense?
@@wealthadventures To be honest I am still lost on the last part. Not sure what “lock in the loss” means. Perhaps you can make a video about this whipsaw scenario
@@trqrider94 I can work on a video. With QQQI or other covered call ETFs, they sell a strike price that is above the current stock price. They collect a premium for doing this but if the stock (index) takes off and goes past the strike price, they do not participate any longer in the gain of the stock. It is limited by that strike price. If the stock plummets the next month back to the original value, you may have a loss despite the stock price being the same. I'll work on a video.
What’s your thought on an equal weight portfolio made up of
QQQI + SPYI 20%
BND 20%
DGRW (or DGRO) 20%
SCHG (or VUG) 20% VOO 20%. Would this create a decent risk adjusted portfolio
Baby daddy @0:10 😂😂😂
I like a lot of those funds. It would be missing international flavor and small caps perhaps.
I missed the return or protection of capital part?
Too new to have much info. Should function similar to SPYI.
So the ROC distributions reduce your cost basis but make it such that the income received is taxed more efficiently.. you're pretty much trading the tax 'savings' on distributions for a reduction in your cost basis? At the end of the day if you decide to sell the fund you'd likely be selling at a loss due to the reduction in cost basis which in a way is the "tax" you would have otherwise paid had the distributions not been classified as ROC. Is my logic correct here?
The perk in my opinion is that if you hold it for over a year, you will be able to sell it and realize a long term gain instead of a short term gain. The ROC sheltered you from much of the short term gain. Not tax advice!
SPYI and especially QQQI are both too new for me. Also, I think these belong in a taxable account for people that are within 1 year or so before retirement, and I'm not there yet.
I get it!
Do you like these more than JEPI and JEPQ?
My largest holdings in this area are JEPI, JEPQ, and DIVO. I think QQQI and SPYI are good options. SPYI has performed well but I only have a small position.
@@wealthadventuressmall position in what percentage, so I can adjust mine.
So does this one return your capital disguised as dividends for lower taxes like SPYI?😂 .. 'tax efficient'👌
Yes. Same setup. I take it you are not a fan? It does allow you to reduce tax burden in the current year so that gains can become long term gains vs short term. However, not receiving anything is the best tax solution.
How is a return of your own capital can be considered a gain?..
@@bonanzatime Not tax advice!... But ROC will adjust your basis. So if you invest $10,000 and get paid $800 of ROC this year, you would have an adjusted basis of $9200. If you were to sell the stock, you would have to pay tax on that $800. Nice perk is that if you hold the stock for over 1 year, it would become a long term gain.
so I bought some today.. 5000 shares.. So tomorrow is EXDATE. so since I bought before EXDATE Im in for the DIVY right ? So can I see tomorrow or the next day and still get the DIVY !!! I might hold it too... QQQ looks like its going to run up still to the highs
If you own shares prior to the Ex-Date, you get the dividend/distribution. Just be aware, the distribution will drop the value of the fund by the amount distributed. Plus you may have tax to pay on the distribution.
Nav erosion?
Perhaps... watch and see! So far it is doing fine but it is so new. No need to rush in.
dont' you ever speak Troy Cates name out of turn again
I'll be talking to him again soon and will give him another opportunity...