Author Topic: Qyld and Ryld  (Read 2249 times)

flowerofsun

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Qyld and Ryld
« on: November 08, 2023, 12:11:33 PM »
Do you guys know much about these? Are there stocks or bonds?
I know its probably a stupid question, but I am really dumb when it comes to things like that.
Ive been investing in S and P 500 for a long time and that's the only thing I know, but want to learn more about other ones...

Telecaster

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Re: Qyld and Ryld
« Reply #1 on: November 08, 2023, 12:23:01 PM »
They are ETFs.  You don't want or need these particular ETFs.   
« Last Edit: November 08, 2023, 12:36:19 PM by Telecaster »

Must_ache

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Re: Qyld and Ryld
« Reply #2 on: November 08, 2023, 12:27:05 PM »
QYLD has returned -3.9%/yr for the last 9.8 years.   But is yielding 12.3% right now.
RYLD has returned -8.1%/yr for the last 4.5 years.  But is yielding 13.5% right now. 

I suppose if you were looking for big dividends and capital losses it's the right ETF for you!
« Last Edit: November 08, 2023, 12:28:41 PM by Must_ache »

Must_ache

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Re: Qyld and Ryld
« Reply #3 on: November 08, 2023, 12:28:11 PM »
They are ETFs.  You don't want or need these.
Surely you can't be serious?
(I am, and quit calling me Shirley)

EvenSteven

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Re: Qyld and Ryld
« Reply #4 on: November 08, 2023, 12:31:09 PM »
They are ETFs.  You don't want or need these.
Surely you can't be serious?
(I am, and quit calling me Shirley)

I agree with Telecaster here. They are ETFs, and the OP shouldn't mess around with these particular ETFs. They never said all ETFs are bad.

Must_ache

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Re: Qyld and Ryld
« Reply #5 on: November 08, 2023, 01:00:46 PM »
Telecaster smartly edited the response to say you don't need THESE PARTICULAR ETFs (as opposed to ETFs in general)

And I wholeheartedly agree now.

MustacheAndaHalf

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Re: Qyld and Ryld
« Reply #6 on: November 09, 2023, 12:05:21 PM »
Do you guys know much about these? Are there stocks or bonds?
I know its probably a stupid question, but I am really dumb when it comes to things like that.
Ive been investing in S and P 500 for a long time and that's the only thing I know, but want to learn more about other ones...
The S&P 500 is a large cap index, so it sounds like you don't invest in the Russell 2000 - a small cap stock index.  $RYLD holds the Russell 2000 while using an options strategy to try and make extra money.  I would not recommend a novice investor start with options strategies.

In general, "covered calls" earn bond income when stocks fall or go nowhere - they will do well at those times.  The stock market, however, has very volatile upwards gains during recoveries and surprises - and "covered calls" lose all of that upside.  The "call" sells the upside to someone else.  You lose big gains in exchange for small dividends.

In Nov 2020, $RYLD gained +8% with an extra +1% in dividends, which sounds like a great monthly return.  But it is a covered call strategy on the Russell 2000 ($IWM), which gained +17% that month.

If you are looking to diversify, I'd suggest a look at your stock/bond mix before checking out options strategies.

Financial.Velociraptor

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Re: Qyld and Ryld
« Reply #7 on: November 09, 2023, 12:24:27 PM »
M&1/2 summed it up pretty well.

There is a place for covered calls in the portfolio of a novice.  Some may disagree with me but it is not on top of broad indexes.  The diversified nature of the ETF suppresses the premium income while still giving up all the upside of writing calls on individual holdings.  That is, it is the worst of both worlds combined into one product.

The "right" investor might still want R/Q YLD if they are in a post retirement drawn down phase.  You earn say 12% on the portfolio and spend a third of the distributions (4%).  You spend the remaining 8% buying more R/Q YLD.  Even with 8-9% loss on the underlying price, you are breaking evenish while extracting 4% income stream, in a way that never sells shares.  Kind of like a variable coupon bond with no maturity date.  Depends largely on your tax situation if that is worthwhile. 

If you are still in the accumulation phase, these are toxic to you...


DISC: No position any securities mentioned.

ChpBstrd

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Re: Qyld and Ryld
« Reply #8 on: November 09, 2023, 03:00:26 PM »
Business model:

Take investors' money. Charge them 0.6% per year to write calls or puts each month. Give them back their money as a dividend. Attract billions in investment from "dividend investors". Repeat.

 

Wow, a phone plan for fifteen bucks!