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QYLD questions
Old 10-27-2021, 10:11 PM   #1
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QYLD questions

I have a small amount of $ in QYLD for the last 6 months, roughly 32k.
It pays 11.8% in annual dividends (paid monthly)
seems solid to me, but surely there is a catch I am missing.
any others here own a position in QYLD & care to offer their thoughts, either good or bad?
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Old 10-27-2021, 11:02 PM   #2
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If you would like to know more about the returns and risks of QYLD versus other Income funds, Gerry has a “GW Retire with Less Channel” on YouTube has done a lot of research and shares his thoughts on them. You can check out one, using this link. He has many others comparisons as well. Here is a link to one of them.
https://youtu.be/x2Mx4DFsat0
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Old 10-28-2021, 12:34 AM   #3
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Quote:
Originally Posted by knucklehead 61 View Post
I have a small amount of $ in QYLD for the last 6 months, roughly 32k.
It pays 11.8% in annual dividends (paid monthly)
seems solid to me, but surely there is a catch I am missing.
any others here own a position in QYLD & care to offer their thoughts, either good or bad?
I only recently learned about QYLD on this forum. I have been researching it but am not an expert. I plan to buy a position a little less than yours on a dip.

This fund has long positions in Nasdaq 100 stocks so you are exposed to losses if the Nasdaq goes down. The Nasdaq has had an amazing run recently so factor that in. As with any covered call writing you are giving up potential future gains from price appreciation in exchange for income from the calls.

From my perspective I don't expect the Nasdaq to crash nor to I expect it to continue its strong run up so QYLD is well suited to me. If you expect the Nasdaq to skyrocket then QQQ might be a better investment. If you think the Nasdaq will fall, QYLD is probably not for you.

There are people on E-R with a lot more expertise on this than me. If I am wrong I hope someone corrects me.
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Old 10-28-2021, 06:35 AM   #4
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QYLD has lower total returns than VTI, plus the expense ratio is 0.60% vs. 0.03% for VTI. I honestly don't know why this fund gets so much hype, it is garbage. Just buy QQQ and write some calls yourself if you want the fund's strategy.
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Old 10-28-2021, 06:41 AM   #5
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Originally Posted by jim584672 View Post
QYLD has lower total returns than VTI, plus the expense ratio is 0.60% vs. 0.03% for VTI. I honestly don't know why this fund gets so much hype, it is garbage. Just buy QQQ and write some calls yourself if you want the fund's strategy.
Or just do 50% QQQ and 50% QYLD. Cuts the distribution in half, but get the upside of QQQ.
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Old 10-28-2021, 06:43 AM   #6
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Or just do 50% QQQ and 50% QYLD. Cuts the distribution in half, but get the upside of QQQ.
Better yet, just avoid it. Total return is the only thing that matters.
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Old 10-28-2021, 06:59 AM   #7
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Originally Posted by SecondAttempt View Post
.... From my perspective I don't expect the Nasdaq to crash ....
QQQ has experienced a horrific crash in the past. Set the slider back to March 2000 to Oct 2002. An 80% drop!!!!

https://stockcharts.com/freecharts/perf.php?SPY,qqq

Quote:
Originally Posted by SecondAttempt View Post
.... There are people on E-R with a lot more expertise on this than me. If I am wrong I hope someone corrects me.
What's the attraction to QYLD? Set the slider to "ALL", QYLD badly under-performs the broad market, and is still quite volatile.

https://tinyurl.com/yzf57yuu <<< www.portfoliovisualizer.com

PortfolioInitial BalanceFinal BalanceCAGRStdev
VTI-Total Market$100,000$266,691 13.49% 14.28%
QQQ$100,000$437,09320.96%16.17%
QYLD$100,000$187,609 8.46% 10.66%

A 60/40 VTI/BND still beats QYLD, and has lower volatility.

PortfolioInitial BalanceFinal BalanceCAGRStdev
60/40 $100,000 $211,970 10.18% 9.66%
QYLD$100,000$187,6098.46%10.66%

What's the attraction to QYLD?

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Old 10-28-2021, 07:18 AM   #8
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And if you really are hooked on QQQ, a 50/50 blend of QQQ/BND provides better returns and lower volatility than QYLD. And is likely more tax efficient as well, if that matters.

At the (100%!) risk of repeating myself, again: "What's the attraction to QYLD?".


PortfolioInitial BalanceFinal BalanceCAGRStdev
QQQ$100,000$437,093 20.96% 16.17%
QQQ/BND 50/50$100,000$283,49014.39%10.51%
QYLD$100,000$187,6098.46%10.66%

-ERD50
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Old 10-28-2021, 07:37 AM   #9
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Originally Posted by knucklehead 61 View Post
I have a small amount of $ in QYLD for the last 6 months, roughly 32k.
^^^^The key quote in the original post. Maybe he sells out of QYLD and puts its into QQQ. No biggie.
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Old 10-28-2021, 07:39 AM   #10
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Originally Posted by Rowej View Post
If you would like to know more about the returns and risks of QYLD versus other Income funds, Gerry has a “GW Retire with Less Channel” on YouTube has done a lot of research and shares his thoughts on them. You can check out one, using this link. He has many others comparisons as well. Here is a link to one of them.
https://youtu.be/x2Mx4DFsat0

Not much of a comparison. He gets to QYLD at ~ 9 minute mark. Just a six-month review, which is not very informative.

-ERD50
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Old 10-28-2021, 11:01 AM   #11
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Originally Posted by jim584672 View Post
QYLD has lower total returns than VTI, plus the expense ratio is 0.60% vs. 0.03% for VTI. I honestly don't know why this fund gets so much hype, it is garbage. Just buy QQQ and write some calls yourself if you want the fund's strategy.
I honestly don't know why people want to or try to compare QYLD with VTI. Apples and bowling balls.
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Old 10-28-2021, 12:14 PM   #12
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I honestly don't know why people want to or try to compare QYLD with VTI. Apples and bowling balls.
Because money = money.

-ERD50
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Old 10-28-2021, 01:34 PM   #13
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Because money = money.

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So everyone's investment goals and objectives are the same? Everyone has the same plans/needs? Everyone's outlook means that anything(and I mean A-NY-thing) should be compared to VTI?

The broken recordness on here of comparing anything/everything to VTI is....welll....intellectually lazy.
Because lazy = lazy.
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Old 10-28-2021, 01:36 PM   #14
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<Mod Note>
Easy to forget, because we have so many indexers here, but this is the Active Investing forum so such comparisons are really off limits here. Thanks for understanding.
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Old 10-28-2021, 02:10 PM   #15
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Quote:
Originally Posted by jim584672 View Post
QYLD has lower total returns than VTI, plus the expense ratio is 0.60% vs. 0.03% for VTI. I honestly don't know why this fund gets so much hype, it is garbage. Just buy QQQ and write some calls yourself if you want the fund's strategy.
Most of QYLDs distributions are NOT from call writing income, but rather a "return of capital".

The correct analogy would thus be to write a call AND sell about 1% of the QQQ shares each month

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Old 10-28-2021, 02:24 PM   #16
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<Mod Note>
Easy to forget, because we have so many indexers here, but this is the Active Investing forum so such comparisons are really off limits here. Thanks for understanding.
I don't really have a problem with comparisons. Relevant ones.
VTI is apples and QYLD is bowling balls. The comparison is silly at best.
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Old 10-28-2021, 06:56 PM   #17
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<Mod Note>
Easy to forget, because we have so many indexers here, but this is the Active Investing forum so such comparisons are really off limits here. Thanks for understanding.
OK, thanks. I guess because QYLD is a play on the index QQQ, I was thinking comparisons to the QQQ index were OK (as I did in my post #8). I guess it was a bit of a sidetrack to compare to VTI/Bonds, but it seemed like a natural progression, but I'll drop that line.

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Old 10-28-2021, 07:01 PM   #18
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I don't really have a problem with comparisons. Relevant ones.
VTI is apples and QYLD is bowling balls. The comparison is silly at best.
OK, forget about VTI then. As I showed in post #8, QYLD doesn't seem to get you anything over a blend of QQQ and BND. The 50/50 blend of QQQ/BND provides better returns and lower volatility than QYLD.

So what's to like about QYLD? I dug up the data and presented it here, that's hardly 'lazy'.

-ERD50
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Old 10-28-2021, 11:04 PM   #19
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QQQ has experienced a horrific crash in the past. Set the slider back to March 2000 to Oct 2002. An 80% drop!!!!

https://stockcharts.com/freecharts/perf.php?SPY,qqq


ERD50
I meant I don't expect the Nasdaq to crash anytime soon. I don't see a dotcom bust coming which is what you showed.

The rest of your post about QYLD I still need to investigate. Like I said, I just learned of its existence recently. It seems to be something that will do well in a sideways market but will underperform in rising and falling markets. Does that seem reasonable? We have had a decent runup fueled by the end of the pandemic. I expect some sideways movement for a while until balance is restore in the world economy and trading systems.
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Old 10-29-2021, 01:27 AM   #20
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5 year total return - QQQ - 239.17%
5 year total return -QYLD - 68.94%

QYLD is a dog with fleas.

Source stockcharts.com, performance.
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