Get More Income Amid Market Volatility With QYLD | ETF Trends

The major stock market indexes have been seesawing back and forth from red to green, but savvy investors are able to take advantage of the opportunity.

These wild rides in the stock market are nothing new. History has shown that these roller coaster rides are often par for course and the patient investor is the one who wins out in the end.

“Seasoned investors know that volatility is part of the package,” a article explains. “Thinking back on recent history, we saw historic volatility in 2008 with the Great Recession, 2015 with the global stock market selloff and, of course, 2020 (no comment necessary).”

“But all that historical volatility became precisely that: ancient history,” the article says further. “Those wild dips and swings reverted back to the mean and normalized over time.”

A big component of weathering the storm is ignoring emotions. Often times, emotions can translate into a rash decision such as selling off too soon.

“Alright, so, volatility will happen. It will feel tough,” Chase says. “But it’s not forever, and as long as you stay in control of your finances and your emotions, you will weather the storm like a pro. It may feel like a rollercoaster, but you’re more in control than you think.”

Get Income While Markets Fluctuate

One ETF that has been benefiting from the market swings is the Global X Nasdaq 100 Covered Call ETF (QYLD). While the volatility measured by the VIX index is up over 70% year-to-date, the distribution yield on QYLD is up 22%.

QYLD follows a “covered call” or “buy-write” strategy in which QYLD buys stocks in the Nasdaq 100 Index and “writes” or “sells” corresponding call options on the same index. As such, not only does QYLD provide equities exposure, the ETF also offers an income component.

In today’s low-rate environment, fixed income investors understand how difficult it is to try to squeeze as much income as possible out of government debt. QYLD seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the CBOE Nasdaq-100 BuyWrite V2 Index.

QYLD offers investors:

  • High income potential: QYLD seeks to generate income through covered call writing, which historically produces higher yields in periods of volatility.
  • Monthly distributions: QYLD has made monthly distributions for six years running.
  • Efficient options execution: QYLD writes call options on the Nasdaq-100 Index, saving investors the time and expense of doing so individually.

VIX Chart

For more news, information, and strategy, visit the Thematic Investing Channel.