Complete QYLD Investment Guide 2025
Generate Monthly Income with Nasdaq 100 Covered Call Strategy 🚀
QYLD ETF generates monthly income by utilizing a covered call strategy on the Nasdaq 100 index.
Use our dividend calculator to project your future income and plan your investment strategy.
- - Current NAV: $21.62 (as of March 31, 2025)
- - 12-month trailing yield: 14.20%
- - Total assets under management: $8.3 billion
- - 30-day SEC yield: 0.27%
- - Year-to-date performance: -5.98%
💡 Note: QYLD provides consistent monthly dividends. Typically, dividends are determined on the third Friday of each month (option expiration date) and paid within about one week.
QYLD (Global X Nasdaq 100 Covered Call ETF) is a popular ETF among income-focused investors. It holds Nasdaq 100 index stocks and sells call options on the index to generate high monthly income.
1. What is QYLD ETF?
QYLD is an ETF launched by Global X in December 2013. It holds Nasdaq 100 index stocks while simultaneously selling call options on the Nasdaq 100 index to generate additional income.
It features a high dividend yield and monthly distributions, making it particularly effective in high volatility market conditions.
Key Features
2. Understanding QYLD's Investment Strategy
2-1. Portfolio Composition
QYLD holds the stocks in the Nasdaq 100 index, providing effective exposure to large U.S. technology companies. The Nasdaq 100 index consists of tech-focused large-cap stocks like Apple, Microsoft, Nvidia, Amazon, and others.
Top 10 Holdings (48.59% of the portfolio) - As of March 31, 2025
| Ticker | Company | Weight (%) |
|---|---|---|
| AAPL | Apple | 9.55% |
| MSFT | Microsoft | 7.98% |
| NVDA | Nvidia | 7.56% |
| AMZN | Amazon | 5.77% |
| AVGO | Broadcom | 3.71% |
| META | Meta Platforms | 3.61% |
| COST | Costco | 2.95% |
| NFLX | Netflix | 2.81% |
| TSLA | Tesla | 2.69% |
| GOOGL | Alphabet (Google) | 2.58% |
Sector Allocation (As of March 31, 2025)
49.58%
15.42%
13.87%
6.18%
Diversified portfolio consisting of 102 stocks
3. QYLD Dividend Characteristics
QYLD's dividends come from premiums generated by selling call options on the Nasdaq 100 index. While it offers high monthly yields, the dividend amount can vary based on market volatility.
QYLD's High Dividend Yield
Dividend Yield Comparison by Asset Class
Source: Global X Asset Management (As of March 31, 2025)
QYLD Monthly Dividend History
Monthly QYLD dividends from April 2024 to March 2025:
| Month | Dividend ($) | Yield (%) |
|---|---|---|
| April 2024 | $0.178 | 1.03% |
| May 2024 | $0.173 | 1.03% |
| June 2024 | $0.178 | 1.05% |
| July 2024 | $0.181 | 1.04% |
| August 2024 | $0.173 | 0.96% |
| September 2024 | $0.177 | 0.97% |
| October 2024 | $0.180 | 1.01% |
| November 2024 | $0.175 | 0.99% |
| December 2024 | $0.186 | 1.05% |
| January 2025 | $0.201 | 1.20% |
| February 2025 | $0.172 | 1.05% |
| March 2025 | $0.168 | 1.12% |
| 12-Month Total/Avg | $2.142 | 14.20% |
* Yield is calculated as the percentage of dividend relative to NAV on the payment date.
* Based on official data from Global X Asset Management (As of March 31, 2025)
Dividend Composition Notes
- • A significant portion of QYLD dividends may be classified as Return of Capital (ROC).
- • As of March 2025, approximately 94.94% has ROC characteristics.
- • ROC dividends may offer tax advantages at the time of distribution but can lower your cost basis, potentially increasing capital gains tax liability in the long run.
- • Dividend composition changes periodically. For accurate information, refer to Global X's official 19a-1 notices.
4. Considerations for QYLD Investment
Advantages
- ✓Provides stable monthly cash flow
- ✓Professional management by Global X
- ✓High dividend yield (approximately 14%)
- ✓Converts option premium income into stable dividends
- ✓Relatively strong performance in volatile markets
Disadvantages
- •Limited upside in strong bull markets
- •Significant portion of dividends classified as return of capital
- •Limited price appreciation potential due to capped upside
- •Sector concentration risk with Nasdaq 100 focus
- •Potentially complex U.S. tax reporting requirements
5. QYLD Performance Analysis
Performance History
| Year | Total Return (%) | Dividend Yield (%) | Nasdaq 100 Return (%) |
|---|---|---|---|
| 2020 | 4.65% | 13.2% | 48.9% |
| 2021 | 21.17% | 11.4% | 27.5% |
| 2022 | -20.61% | 12.8% | -33.1% |
| 2023 | 16.82% | 12.5% | 53.8% |
| 2024 | 13.79% | 13.8% | 24.9% |
| 2025 (YTD) | -5.98% | 14.2% | -8.07% |
Source: Global X Asset Management (As of March 31, 2025)
QYLD Performance by Market Condition
QYLD demonstrates differentiated performance in various market environments:
Advantageous in Down Markets
In 2022, when the Nasdaq 100 fell 33.1%, QYLD declined only 20.61%, showing relative defensive strength.
Suitable for Sideways Markets
When markets trade in a narrow range, option premium income can lead to outperformance compared to standard index investments.
Disadvantageous in Strong Bull Markets
In 2023, when the Nasdaq 100 surged 53.8%, QYLD gained only 16.82%, demonstrating significant underperformance.
Key Takeaways
- Shows defensive characteristics in down markets, effective for portfolio risk management
- Generates reliable monthly income streams
- Best suited for income-focused investors rather than growth-oriented investors
- May miss significant price appreciation, suggesting value in combining with growth assets
6. Comparison with Other Dividend ETFs
Characteristics of Popular Dividend ETFs
| Feature | QYLD | JEPI | JEPQ | SCHD |
|---|---|---|---|---|
| Underlying Index | Nasdaq 100 | S&P 500 | Nasdaq 100 | Dow Jones Dividend 100 |
| Investment Strategy | ATM Covered Call | ELN + OTM Covered Call | ELN + OTM Covered Call | Dividend Growth Stocks |
| Dividend Yield | 14.2% | 7~9% | 9~12% | 3~4% |
| Dividend Frequency | Monthly | Monthly | Monthly | Quarterly |
| Growth Potential | Limited | Moderate | Moderate | High |
| Expense Ratio | 0.60% | 0.35% | 0.35% | 0.06% |
| Launch Year | 2013 | 2020 | 2022 | 2011 |
Considerations When Choosing ETFs
7. Frequently Asked Questions
How are QYLD dividends taxed?
A significant portion of QYLD dividends is often classified as Return of Capital (ROC), which may not be immediately taxable. However, ROC reduces your cost basis, potentially increasing capital gains tax when you sell. As a U.S. ETF, a 15% withholding tax may apply for non-U.S. investors. Tax treatment varies by country and individual circumstances, so consulting with a tax professional is recommended.
Why do QYLD dividend amounts vary month to month?
QYLD dividends fluctuate based on the premiums received from selling call options on the Nasdaq 100 index. When market volatility is high, option premiums increase, potentially leading to higher dividends. Conversely, lower volatility periods may result in smaller dividend payments. Global X typically distributes only a portion of the option premium as dividends, generally following a policy of paying out the lower of 1% of NAV or half of the option premium as the monthly dividend.
How does QYLD differ from JEPI/JEPQ?
QYLD holds the entire Nasdaq 100 index and sells at-the-money (ATM) call options on 100% of the portfolio. JEPI and JEPQ use a combination of equity-linked notes (ELNs) and out-of-the-money (OTM) call options. This strategy difference means QYLD typically offers higher dividend yields but has greater upside limitations, while JEPI/JEPQ allow for more upside participation. QYLD concentrates on Nasdaq 100 stocks with a high technology weighting, whereas JEPI is based on the S&P 500, offering more sector diversification.
Is QYLD suitable for long-term investment?
QYLD is primarily designed for investors seeking regular income streams (e.g., retirees). Since it focuses on stable monthly dividends rather than long-term capital growth, it's often best used as one component of a broader portfolio. Investors seeking long-term growth might consider combining QYLD with dividend growth ETFs like SCHD or standard index ETFs for a more balanced approach.
Does QYLD's NAV tend to decline over time?
QYLD may experience limited NAV growth due to the covered call strategy's upside cap in rising markets. Additionally, since a significant portion of dividends has return of capital (ROC) characteristics, there is potential for long-term NAV erosion. Understanding this characteristic is important—investors may want to reinvest dividends or pair QYLD with growth assets to balance this tendency.
8. Conclusion and Investment Strategies
Who Should Consider QYLD?
Suitable for:
- Retirees or financial independence seekers needing regular monthly income
- Investors who plan to use dividends for living expenses
- Those seeking income streams less affected by market volatility
- Investors allocating a portion of their portfolio to defensive assets for risk management
- Global investors looking to diversify dollar-based income sources
Less suitable for:
- Young investors prioritizing long-term capital growth
- Those seeking full participation in bull markets
- Investors highly focused on tax optimization (due to ROC complicating tax treatment)
- Those seeking broad sector diversification beyond technology
Effective QYLD Implementation Strategies:
- Income Portfolio Component: Allocate 20-30% of your portfolio to QYLD for stable monthly income
- Dividend Reinvestment: Reinvest dividends during periods when income isn't needed to increase your share count
- Hybrid Portfolio: Hold QYLD alongside growth-oriented ETFs like SCHD or QQQ for a balance of income and growth
- Market Correction Entry Tool: Increase QYLD allocation during market corrections for volatility management and cash flow
- Diverse Covered Call ETF Combination: Combine QYLD with other covered call ETFs like JEPI, JEPQ, and XYLD for sector diversification