QYLD Stock: Get All the Key Data Before Investing

The Global X NASDAQ 100 Covered Call UCITS ETF (QYLD Stock), launched on November 22, 2022, has quickly established itself as a significant player in the ETF market. Despite being just one year old, it has attracted substantial interest, managing assets totalling €191.08 million. This ETF, identified by ISIN IE00BM8R0J59 and WKN A2QR39, follows a Synthetic (Unfunded) replication method, aiming to deliver performance in line with the NASDAQ 100 index through a covered call strategy.

The fund’s annual total expense ratio (TER) is 0.45%, with fees being continuously deducted and already incorporated into the ETF’s overall performance. This balance of high-yield potential and managed risk has made it an attractive option for income-focused investors.

QYLD can benefit investors seeking consistent income, as it offers a high dividend yield through a covered call strategy, making it an attractive option in volatile markets where steady income is prioritized over capital appreciation.

What is QYLD Stock?

QYLD stock employs a buy-write or covered call investment strategy. In this approach, the fund purchases stocks from the Nasdaq 100 Index and simultaneously sells or “writes” call options on the same index. This strategy is designed to generate additional income through the premiums received from selling these options, which can enhance the overall yield of the investment.

However, by selling call options, the fund caps its potential upside gains, exchanging the possibility of significant capital appreciation for a more consistent income stream. This makes QYLD appealing to investors prioritising high dividend yields over potential growth.

The performance of QYLD stock is aligned with the Cboe Nasdaq 100 Buy/WriteV2 Index, providing results that correspond to the yield and price movements of this index before accounting for expenses and fees. This alignment offers investors a reliable, income-focused investment tied to the performance of the major technology companies within the Nasdaq 100.

QYLD Stock Dividend History, Price and Other Key Data

Primary Exchange: Nasdaq
Shares Outstanding: 465,760,000
Number of Holdings: 102
Share Volume: 6,360
52-Week High/Low (QYLD Stock Price): $18.04 / $15.91
Annual Dividend: $2.1492
Ex-Dividend Date: August 19, 2024
Dividend Pay Date: August 26, 2024
Distributions (As of 08/19/24):
30-Day Median Bid-Ask Spread: 0.06%
30-Day SEC Yield: 0.21%
12-Month Trailing Yield: 13.22%
Distribution Yield: 11.81%
Distribution Frequency: Monthly

QYLD stock forecast

According to Wall Street analysts providing 12-month price targets, the average stock price QYLD target is $20.28, with a high forecast of $24.28 and a low forecast of $16.27. The average price target represents a 13.55% change from the last price of $17.85.

QYLD/EUR 5-Day Chart

ETF Investment Plan Overview

The Global X NASDAQ 100 Covered Call UCITS ETF (Dist) pays out distributions every month as per its distribution policy, with distributions scheduled for every month of the year. The current expected distribution yield stands at 11.57%. 

For the current year, the expected distribution per ETF unit is €1.75, resulting in a distribution yield of 11.57% for the Global X NASDAQ 100 Covered Call UCITS ETF (Dist). This ETF has a volatility rate of 5.78% and experienced a maximum drawdown of -5.07% over one year.

This year, the Global X NASDAQ 100 Covered Call ETF (QYLD) has not performed as well as the Nasdaq 100 Index. It has only returned 0.98%, while the Invesco QQQ and SPDR S&P 500 ETF (SPY) have seen gains of over 11%.

The total returns of the Global X NASDAQ 100 Covered Call ETF (QYLD) have fallen behind those of the Nasdaq 100 Index this year, with a return of just 0.98%. In contrast, the Invesco QQQ and SPDR S&P 500 ETF (SPY) have both experienced increases exceeding 11%.

QYLD ETF Continuing to Track the Nasdaq 100

Since its inception, the ETF stock, QYLD has consistently shown lower returns than Invesco QQQ. Yahoo Finance data indicates that the QYLD stock quote’s highest annual return was in 2019, with a gain of $22,685, while its worst year was in 2022, with a loss of 19%. In contrast, Invesco QQQ saw its best performance in 2023, with a 54% increase, followed by strong returns in 2020, 2019, and 2017, all surpassing 32%.

Despite its underperformance, QYLD remains a costly ETF to hold, with an expense ratio of 0.61%, significantly higher than the 0.20% charged by the QQQ fund. This disparity is justified by the fact that QYLD is actively managed.

The QYLD ETF targets novice investors looking for growth in their investment along with steady dividend income. Offering an impressive dividend yield of around 11.79%, it surpasses most passive ETFs. In contrast, QQQ and SPY have dividend yields lower than 1%.

Is QYLD a Good Investment?

The QYLD ETF buys individual stocks from the Nasdaq 100 index instead of the whole index. This strategy helps the fund stay flexible, saving on fees and closely mirroring the Nasdaq 100’s performance.

It offers high-income potential through covered call writing, which generally produces high yields during market volatility. Finally, QYLD sells call options on the Nasdaq-100 Index, providing a convenient and cost-effective way for investors to gain exposure.

Please note investing in covered call strategies like QYLD involves risks, including the potential for limited upside and losses if the market declines significantly. Investors should carefully consider their financial situation and investment objectives before investing in this ETF.

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