Marcos Milla
Former Analyst at the Federal Reserve, ETF/Stock Newsletter Author
XQQI and XSPI will be two of the highest-performing covered-call ETFs of the next decade, better than QQQI and SPYI, because they should keep up with or slightly outperform their underlying indexes while paying monthly distributions. Canadian leveraged index-based income ETFs have shown how this works over the last five years. x.com
The new generation of covered-call income ETFs on the S&P 500 and Nasdaq 100 is preferable to traditional dividend funds like SCHD, serving as counterbalances built to underperform in bull markets and outperform in flat or down ones. Given a bullish long-term market outlook, plain S&P 500 or Nasdaq 100 funds should still outperform them over decades. x.com x.com
SPYI, QQQI, JEPQ, JEPI and QDVO are tier-one income ETFs, pairing high yields with minimal NAV decay and solid records. NEOS' SPYI yields about 10-12% with very stable NAV, using a tax-efficient options strategy that keeps more upside than covered calls; QQQI applies it to the Nasdaq-100 for 13-15%. JPMorgan's JEPQ yields 8-10% via ELNs and JEPI 7-9% with a defensive tilt, while Amplify's QDVO yields 9-11% from growth stocks plus options income. x.com x.com x.com x.com x.com x.com
The S&P 500 fund VOO beats covered-call income ETFs like GPIX and QQQI because covered calls cap upside, leaving long-run returns worse. Since GPIX's October 2023 inception, VOO has compounded 26.4% a year versus GPIX's 23.6%, while QQQ's 25.4% beat QQQI's 21%. Fees add drag of about 1.1% for GPIX and 2.2% for QQQI versus 0.1% for VOO, and large monthly payouts are tax-inefficient. x.com x.com
QQQ remains the better way to grow wealth than QQQI, because taxes on QQQI's distributions further erode its return even for holders who reinvest them. A post the author replies to notes QQQI lets holders keep distributions without selling shares, which some prefer. x.com
QQQI offers automated income without the work of managing options, paying distributions north of 1% a month from an options-selling strategy. Its return-of-capital structure means the distributions carry no tax burden until principal is sold. x.com
JPMorgan Nasdaq Equity Premium Income ETF trades away upside for its monthly income. Its synthetic covered-call structure caps participation in the biggest up days, exactly where Nasdaq returns are concentrated, so its income math looks clean only until compared with simply holding QQQ over the same period. x.com
The NEOS S&P 500 High Income ETF suits investors who want cash income over capital appreciation. $400,000 in it could generate about $4,200 a month in distributions, versus about $347 a month from the Vanguard S&P 500 ETF. Both may deliver a similar total return of around 12%, one through more income and the other through more price appreciation. Critics such as @Budgetdog_ note the payout comes from a covered-call strategy that caps upside and may partly return capital. x.com x.com
The Nasdaq 100 high-income ETF QQQI is a core long-term hold, with its distributions reinvested to compound over time. x.com
Nasdaq-100 tech stocks should follow strong guidance higher: guidance is particularly strong in tech, and when the business does well, the stock price eventually follows. x.com
The Nasdaq-100 is exposed to contagion as specific mispriced stocks implode, while the S&P 500 would be hit less. This is not a general bearish view on equities; it comes from idiosyncratic mispricings first. @quantian1 argues that if those shorts pay off, the S&P 500 would probably fall about 30%. x.com
