4H·

New dividend

Another month and another dividend I can reinvest. Total this month will be around 1275€ so my capital is compounding at a nice rate.

17.04

Other Global X S&P 500 Covered Call ETF

Received x3052 Dividends at $0.148

$451.56

13 Comments

TotallyLost@TotallyLost

Let me ask you a question, why would you buy a product that gives you an almost guaranteed lower return for the same risk?

Just buy a distributing S&P500 ETF like $IUSA...
https://extraetf.com/de/etf-comparison?products=IE0002L5QB31-etf,IE0031442068-etf,LU0255640731-fund

If you want regular payouts, you can also add a high-yield bond fund to your portfolio, which offers similar returns with lower volatility.
For example $NKCT2F

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Melchior@ColdzeroNL

@TotallyLost For me specifically it is a product that covers the cost of my mortgage. I work in a industry where my job isn't guaranteed for longer than maybe 5 years and this gives me peace to know that my largest cost of living is already covered. The rest of my capital is invested in broad ETF's or individual stocks I trust to deliver a return for > 20 years.

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TotallyLost@TotallyLost

@ColdzeroNL Great answer, thanks, but you might be overlooking high-yield bonds.
They’re more predictable and less volatile than covered calls.

Check them out—high-yield bonds are rarely discussed by YouTubers or in investment forums, but their long-term track record speaks for itself.

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Melchior@ColdzeroNL

@TotallyLost Thanks for the answer. I'll have a closer look into those. For me the combination of distribution and the price increase (which I had for the past year) makes it a fitting combination. I won't expand the position and use the dividends to invest elsewhere. I see it as a fund I use in case of work loss that also makes me flexible to invest in other opportunities with the dividends.

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Solitair@Solitair

@ColdzeroNL i see you also have $YYYY which you're keep buying despite the continuing decline in NAV and distributions for months now. What are your thoughts about that? I have this etf myself but think about selling, taking the loss and shifting the money to $WINC

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Melchior@ColdzeroNL

@Solitair I did that to lower my average cost per share. I think it will rebounce back above 40 within the next 6 months. The companies in it are really strong but volatile this past months so im not really worried.

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TotallyLost@TotallyLost

@ColdzeroNL It cannot recover. This is because the call options that the ETF sells represent its upside potential.
CC ETFs fall just like regular ETFs, but they do not recover in the same way.

If you’re betting on a recovery, you need to sell your CC ETF and buy a regular ETF.

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Melchior@ColdzeroNL

@TotallyLost Offcourse it can recover, just at a slower rate than if it would be a normal ETF with the same holdings. Otherwise you wouldnt see the bounce back between april 25 and may 25.

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TotallyLost@TotallyLost

@ColdzeroNL Do you know why YYYY managed to do that?
I don't know, maybe they got lucky with the CCs' expiration dates, who knows...

Most other CC ETFs have never recovered from “Liberation Day.”

The Nasdaq has already recovered and is at an all-time high, but YYYY hasn’t...

If it hasn’t recovered yet, it could take years for it to reach its previous highs again.

And if you're betting on a recovery, you should buy call options rather than sell them.

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Melchior@ColdzeroNL

@TotallyLost Have you looked at the positions in $YYYY? Then you would know why the price dropped and why it can recover ( a large portion is software and semiconductors etc.). So for me it's almost a given that we will see a price of over 40 euro and that's why I reïnvested in it.

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TotallyLost@TotallyLost

@ColdzeroNL That sounds reasonable,
but it still doesn't explain why you aren't using a product to take advantage of rising prices—one whose price isn't rising as sharply.

No offense, I just want to point out a few things I would consider.

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View one more answer

Katie@Katie_1

You have a very inspiring portfolio. So many dividends!👍

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