The NEOs Nasdaq-100 High Income ETF (QQQI) offers superior total returns and comparable income to the Global X NASDAQ 100 Covered Call ETF (QYLD). QQQI employs a more sophisticated options strategy, capturing more upside while maintaining strong income and better net asset value preservation than QYLD. Despite QQQI's aggressive approach, it performed in line with QYLD during recent market sell-offs, demonstrating resilience in volatile conditions.
QQQI delivers a 14.5% yield, sustainable monthly income, and impressive upside capture, earning my strong buy rating and daily additions to my portfolio. The ETF uses a dynamic, actively managed options strategy to generate high income while minimizing NAV erosion and maintaining exposure to big tech growth. QQQI's tax efficiency—thanks to Section 1256 contracts and return of capital distributions—boosts after-tax returns for investors seeking income.
Whether looking to diversify income streams or to enhance income potential in existing exposures, investors find themselves with a diverse array of options-based ETFs to choose from. Troy Cates, co-founder, managing partner at NEOS Investments and Cinthia Murphy, investment strategist at VettaFi talked tax-efficient income on the recent Alternatives Symposium hosted on the VettaFi platform.
QQQI provides investors exposure to the Nasdaq 100 while also employing a call writing strategy. The call writing strategy, with writing calls against the index, can help to generate a high monthly distribution rate. I tend to prefer QDTE's strategy overall, but QQQI's results are impressive nonetheless.
QQQI stands out among covered call ETFs by delivering a high, stable yield (14%) without net asset value decay, outperforming peers and even the S&P 500. The fund's data-driven options strategy on the volatile Nasdaq-100 enables strong, consistent monthly income and impressive upside capture—98% of QQQ's return last year. Unlike many competitors, QQQI has grown its NAV and maintained steady payouts, avoiding the common pitfall of eroding capital to fund distributions.
QDVO offers a compelling blend of capital appreciation and high monthly income, with a 20.52% total return since inception, outperforming peers. The ETF tactically writes covered calls, allowing for upside participation while generating recurring income, unlike more rigid covered call strategies. QDVO's portfolio focuses on large-cap growth stocks, especially tech, which presents both strong growth prospects and sector concentration risk.
I reiterate my strong buy rating on QQQI due to its consistent income, strong total returns, and flexible options strategy. QQQI's active management and dynamic covered call approach have enabled it to outperform traditional covered call ETFs, especially during volatile and rallying markets. The fund offers a high yield (13.85%) and tax advantages, while maintaining steady payouts even in challenging environments.
QQQI offers monthly income via options on Nasdaq 100 constituents, but its returns lag behind QQQ, which tracks the same index without options. Top holdings like NVDA, MSFT, and AAPL are strong, but QQQI's options strategy fails to deliver superior performance or justify higher fees. QQQI marginally outperforms QQQ during market downturns, but overall, QQQ provides better long-term returns with lower complexity and cost.
QQQI piqued my interest as rising NASDAQ valuations make covered-call funds attractive. But I see better alternatives such as QYLD and JEPQ. Compared to these funds, QQQI has higher fees and lower liquidity.
QQQI stands out among high-yield ETFs by delivering both strong income and capital appreciation, outperforming peers like JEPQ and QYLD in recent volatile markets. The fund's unique call spread strategy allows for recurring double-digit yields while maintaining upside potential, unlike traditional covered call ETFs that cap gains. NEOS NASDAQ-100 High Income ETF's portfolio is heavily weighted toward high-growth big-tech names, positioning it to benefit from expected earnings growth and a continued bull market.
Advisors and investors wanting to enhance existing tech exposures or harness volatility in the category for income should consider the award-winning NEOS Nasdaq 100 High Income ETF (QQQI). The fund remains competitive and a strong performer within its category since inception.
QQQI is a relatively new covered call ETF that has been gaining in popularity this year. QQQI currently has limited active exposure vs QQQ. Its performance is lagging the QQQ but without providing much downside protection either. After-tax, QQQI would fare even worse vs QQQ. QQQI's option writing decisions relies on an opaque, rules-based model. We don't know anything about how well it does in a full market cycle due to a limited performance history.