The Recon Capital NASDAQ 100 Covered Call ETF (QYLD) had a distribution yield of 10.4 per cent in 2014. The fund’s monthly distributions totalled more than 10 per cent for the year.
QYLD, which seeks to track the CBOE NASDAQ 100 BuyWrite Index (BXN), began trading on the NASDAQ on 12 December, 2013, and was created as a fixed income alternative for retail investors and financial advisors.
The monthly options premiums collected were designed to serve as a buffer from market downswings, lowering the volatility and offering increased portfolio protection.
“Unlike many fixed income investments, QYLD faces no headwinds from rising interest rates, nor is it susceptible to duration risk,” says Kevin R Kelly, Managing Partner of Recon Capital. “Rather, QYLD seeks to provide investors with a low volatility, non-leveraged, tax-efficient product that pays out a monthly income, instead of making distributions by quarter or on an annual basis. We are proud to round out 2014 – and the first year of QYLD trading – with a 10.4 per cent yield for our investors, particularly as the 30 Year Treasury sits below 2.75 per cent.”
The index consists of innovative companies in each of their respective sectors, including Apple, Google, Gilead, Starbucks and Facebook.
