Halfway Covered Nasdaq-100 ETF Debuts

September 21, 2020

Today, Global X has expanded its family of covered call ETFs with the addition of two funds that pair the common options strategy with growth potential. The Global X Nasdaq 100 Covered Call & Growth ETF (QYLG) is very similar to the $1.3 billion Global X NASDAQ 100 Covered Call ETF (QYLD), except that it is not fully covered. Similarly, Global X S&P 500 Covered Call & Growth ETF (XYLG) is a less covered countrpart to the $108 million Global X S&P 500 Covered Call ETF (XYLD).

QYLG and XYLG come with expense ratios of 0.60%. QYLG lists on the Nasdaq stock exchange while XYLG lists on the NYSE Arca.

While QYLD holds the stocks in the Nasdaq-100 Index and sells options on those stocks, generating premium income, QYLG holds the same stocks and writes one-month at-the-money covered call options on the index for roughly half the value of the stock portfolio. In this way it is only covered halfway, and the strategy leaves more space for investors to benefit from the growth many seek when they invest in the stocks of the Nasdaq-100. XYLG does the same with the S&P 500 Index.

The family of covered call ETFs also includes the the $19 million Global X Russell 2000 Covered Call ETF (RYLD).

Contact Heather Bell at [email protected]

 

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