QQQI-14% yield, what do you think of it?

[rjsos5]

QQQI- out only a few years but offers about 14% yield, pays monthly. Here is description from Morningstar, "The investment seeks to generate high monthly income in a tax efficient manner with the potential for equity appreciation. The fund is an actively-managed exchange-traded fund (“ETF”) that seeks to achieve its investment objective by investing in a portfolio of stocks that make up the Nasdaq-100® Index and a call options strategy, that consists of written (sold) call options on the Nasdaq-100® Index. " Total performance seems to mirror the S&P so far, slightly underperforms QQQ. Far outperforms JEPI (covered call strategy too) that was popular awhile back, and threw in PDI for fun which it far outperformed for timeframe available for QQQI.. So curious for those who like income in and and itself, what do you think?

JEPI,QQQI,SPY,QQQ,PDI Stock Chart (Dividends Reinvested, Inflation Adjusted) | Total Real Returns

 

[wolf]

Basic rule: Higher return = Higher risk. There is no free lunch.

 

[Contrarian]

QQQI- out only a few years but offers about 14% yield, pays monthly. Here is description from Morningstar, "The investment seeks to generate high monthly income in a tax efficient manner with the potential for equity appreciation. The fund is an actively-managed exchange-traded fund (“ETF”) that seeks to achieve its investment objective by investing in a portfolio of stocks that make up the Nasdaq-100® Index and a call options strategy, that consists of written (sold) call options on the Nasdaq-100® Index. " Total performance seems to mirror the S&P so far, slightly underperforms QQQ. Far outperforms JEPI (covered call strategy too) that was popular awhile back, and threw in PDI for fun which it far outperformed for timeframe available for QQQI.. So curious for those who like income in and and itself, what do you think?

JEPI,QQQI,SPY,QQQ,PDI Stock Chart (Dividends Reinvested, Inflation Adjusted) | Total Real Returns

I find a lot of these high income vehicles a bit gimmicky though will always review performances, preferably history has long term which QQQI lacks. For above, rather just have the QQQ and periodically sell for "income", better total performer, seems similar volatile and after tax return probably significantly better too if in taxable. But remember how popular JEPI was for a while too, the next new shiny thing for a time. Just my take.

 

[rjsos5]

Basic rule: Higher return = Higher risk. There is no free lunch.

Well at least this high yielder does have higher return unlike other high yield stuff but agree with your point. They are not my cup of tea as can tell from my prior posts but still curious others' thoughts. Monthly payor with a 14% distribution and actually good total performance. But think contrarian point of view closer to mine.

 

[Al18]

The fund is just over 2 years old, has no Morningstar rating - not touching it. By comparison has a Gold rating and it's 6 years old.

 

[Koolau]

I ceased chasing yield a long time ago. It's probably a viable strategy to do so for those who are willing to stay on top of things and move in and/or out on short notice. I'm enjoying a more of a couch-potato investor existence now. I'm keeping my old Megacorp stock as "my" high-flyer right now. Quite volatile, but seems to continue trending up over time. Good enough for me.

An experimental acquisition of some QQQI for the yield (if you can afford the risk) would seem a worthwhile gamble but just understand that risk. Best luck.

 

[Quattro73]

It is going to perform in near lock step with QQQ only will most likely lag the total return due to the options limiting the upside. The options might also help the downside in certain circumstances.

 

[Lawrencewendall]

I've held just over a year now. From what I've read, it is one of the few covered calls that doesn't destroy its NAV. I'll hold for now and DRIP.

 

[Onda]

QQQI has performed about as well as VTI since inception, but with higher concentration risk, option-strategy complexity, higher fees, and less tax simplicity. For me, that is not a compelling tradeoff. I would rather own VTI as a cleaner long-term core holding than chase monthly distributions that don’t meaningfully improve total return or safety.

 

[ncbill]

QQQI is one of the better CC ETFs for cash flow since that primarily comes as return of capital.

Which is not currently taxed but instead the distributions lower the basis of the investment.

So it's useful for those w/ taxable assets trying to limit mAGI for premium tax credits under the ACA.

 

[RetiredHappy]

Since QQQI is risky, you might as well get more total returns by buying QQQ.

 

[MRG]

Held it for a year. Its a CC fund that's been decent with not destroying NAV. Neos recently posted a video going over destroying NAV and how they avoid it.

These products are for income, not growth.

 

[Quattro73]

Held it for a year. Its a CC fund that's been decent with not destroying NAV. Neos recently posted a video going over destroying NAV and how they avoid it.

These products are for income, not growth.

Yes but it is nearly 1:1 correlated to the index whether QQQ or SPY in the case of SPYI. You get most of the upside and downside. The drawdown mitigation of the option overlay does not protect you. You are getting materially the same result as the underlying just within a slightly compressed range but not real drawdown protection or mitigation as best I can tell. So why not hold the underlying index (or some percentage thereof mixed with some t-bills or other safe asset ) and sell when needed?

That has been my struggle when evaluating.

 

[floss187]

I own SPYI, it's sister fund. Since 2024 with dripping, it's returned 45%. which is less than SPY did in that time.

The only real reason to own it is to not have to sell shares for cash. Take it as a distribution instead. If you're in growth phase, just hold the index is my opinion.

I hold like 50 different high payout covered call funds and such from neos, defiance, yieldmax, etc in small quantities. A few have made a ton of money. Several are all house money now (sold the nut at 100% gain, let the rest ride). Many are down 70-90%.

 

[joejetski]

It is going to perform in near lock step with QQQ only will most likely lag the total return due to the options limiting the upside. The options might also help the downside in certain circumstances.

Good for a sideways market, or slow up or slightly down. Can mitigate some downside on extended market downturns, but lags behind if QQQ shoots up.

QQQX the old man of the CC group started before the GFC. Not the highest yield, but if you want income and a little growth, it did that in spades.

 

[MRG]

Yes but it is nearly 1:1 correlated to the index whether QQQ or SPY in the case of SPYI. You get most of the upside and downside. The drawdown mitigation of the option overlay does not protect you. You are getting materially the same result as the underlying just within a slightly compressed range but not real drawdown protection or mitigation as best I can tell. So why not hold the underlying index (or some percentage thereof mixed with some t-bills or other safe asset ) and sell when needed?

That has been my struggle when evaluating.

Correlation is what keeps me from playing with this particular one more. They have a nice niche for folks with taxable money they want income that isn't really income, ROC. At least some is. The other thing with these products is the distribution is very variable. Look at what happened to BTCI distributions. Anyone counting on that for a house payment might have a problem.

I think QQQH has some downside protection but less yield. It's still based on QQQ so same issue for many.

One that is interesting, since I have no MLP exposure is MLPI. No K1 and the same ~14% distribution.

 

[Lorenzo]

The only real reason to own it is to not have to sell shares for cash. Take it as a distribution instead. If you're in growth phase, just hold the index is my opinion.
…

It’s good for people who need the income right now but can’t bring themselves to sell shares.

 

[Semi-Retyrd]

Here is an update on Armchair's top 10 which includes QQQI at number 2. QQQI underperforms QQQ in bull markets and outperforms in sideways and down markets. It also has good after tax performance for folks looking for low tax income.

 

[dobig]

Very useful for us early retirees trying to stay under ACA income limits as others have mentioned. It's worth a 1.5% position to me.

I like GPIX and GPIQ better. Same ROC distributions with lower yields but less leverage and more upside while still having a downside buffer. The only problem with these funds is no one knows how they'll do in a prolonged bear market. I wouldn't be going all in on these funds but I will take some risk to achieve my goals. I have an 8% position in covered call funds. The majority in less leveraged and what look like higher quality funds. GPIX, GPIQ, FYEE, QDVO and much smaller amounts in SPYI, GRNI and QQQI. I certainly like these better than cefs that seem much more prone to Nav decay. UTG and UTF being the few exceptions.

 

[Flieger]

I have several NEOS funds. BTCI is worst performer, but I figured it was a gamble.

Flieger

 

[YellowSubmarine]

I have several NEOS funds. BTCI is worst performer, but I figured it was a gamble.

Flieger

I agree, I dumped my BTCI (and QSLV) several months ago. Better total return options out there. fwiw
I do like the QQQI and SPYI...no regrets there.

 

[joejetski]

I own QQQI and SPYI across my portfolio (taxable, TIRA, and Roth). I also own MLPI in my TIRA.

 

[acksurf]

A lot of people look at this as QQQI v QQQ. I don't look at it that way. I don't want to sell my QQQ (or equivalent) to pay for my groceries. I want to let QQQ (growth) run until I choose to make a large purchase or rebalance. I hold covered calls in place of bonds, not QQQ or other growth funds. I have plenty of growth. For those, holding 90-100% QQQ and/or VOO then I can see the perspective to sell regularly for income. Otherwise, not so much. I find that when I have a growing monthly income I can be more aggressive than I might otherwise be. YMMV.

 

[Lorenzo]

Quick question on the ROC issue: How do you keep track of ROC for adjusting your basis? Does your brokerage automatically adjust the basis that they report to you?

 

[RetiredHappy]

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