{"id":6712,"date":"2023-10-29T12:15:44","date_gmt":"2023-10-29T12:15:44","guid":{"rendered":"https:\/\/infundpros.com\/markets\/how-to-play-a-bounce-in-tech-with-dividends-up-to-12\/"},"modified":"2023-10-29T12:15:45","modified_gmt":"2023-10-29T12:15:45","slug":"how-to-play-a-bounce-in-tech-with-dividends-up-to-12","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=6712","title":{"rendered":"How To Play A Bounce In Tech With Dividends Up To 12%"},"content":{"rendered":"
\n

This entire market meltdown has been based off of a flawed premise. We income investors must take advantage of it, before sanity returns to the markets.<\/p>\n

The 10-year Treasury yield soared above 5%. On its journey to the stars the higher 10-year has clipped equities severely along the way. A high benchmark rate upsets every<\/em> applecart in finance.<\/p>\n

But here\u2019s the thing. This is not a sustainable move.<\/p>\n

Inflation isn\u2019t really<\/em> in a spiral higher. In fact, it\u2019s the opposite. Core PCE (personal consumer expenditures)\u2014the Federal Reserve\u2019s preferred measure of inflation\u2014is dropping like a rock.<\/p>\n

Note, this excludes<\/em> food and energy prices. Which, some argue, is not appropriate because oil prices are high again.<\/p>\n

I\u2019ve been an oil bull for years now\u2014and I disagree<\/em> that high oil is worrisome for inflation. Future inflation<\/em>, that is.<\/p>\n

High oil prices are a tax on the consumer. Yes, another drag on the economy, as are high interest rates.<\/p>\n

High crude slows the economy. It likely already has. And the Fed\u2019s rate hiking mission will<\/em> bring a recession.<\/p>\n

<\/fbs-ad><\/p>\n

Then, when the economy slows, Jay Powell\u2019s Fed will ease rates.<\/p>\n

The \u201cBond King,\u201d Bill Gross, agrees:<\/p>\n

So do more bond market participants. They are seeing what we\u2019ve been saying\u2026 that this move to 5% is overdone.<\/p>\n

If rates drop, what does that mean for rate-sensitive stocks?<\/p>\n

It means they\u2019ll rip off of their lows.<\/em><\/p>\n

The first potential ripper yields 12.2%. That\u2019s right\u2014we\u2019ll collect a twelve-point-two percent payout<\/em> while we watch this fund pop as rates ease!<\/p>\n

Global X Nasdaq 100 Covered Call ETF (QYLD
\n
\n QYLD
\n <\/fbs-ticker>
\n
\n YLD
\n <\/fbs-ticker>)<\/strong><\/p>\n

Dividend Yield:<\/strong> 12.2%<\/p>\n

Technology stocks are particularly attractive plays here because they act like \u201clong duration\u201d assets. When rates rise, tech drops. We\u2019ve seen that over the past two years as the QQQs sank lower and lower.<\/p>\n

But a top in rates means a potential bottom in tech stocks. At least<\/em> for a period of time here. Here we\u2019ll focus on the dividend payers because, well, why not<\/em> double dip our gains with some big yields.<\/p>\n

Among alternative-style ETFs, the Global X Nasdaq 100 Covered Call ETF (QYLD)<\/strong> is one of the oldest\u2014it will celebrate its 10th birthday this December.<\/p>\n

The Global X Nasdaq 100 Covered Call ETF is an index fund that does exactly what the name suggests:<\/p>\n

First, it buys all of the stocks in the technology-heavy Nasdaq-100 Index (in roughly the same weights they enjoy in the index). Indeed, the top 10 holdings exemplifies how similar its equity holdings are to the Invesco
\n
\n IVZ
\n <\/fbs-ticker> QQQ
\n
\n QQQ
\n <\/fbs-ticker> (QQQ)<\/strong>.<\/p>\n

Of course, Apple
\n
\n AAPL
\n <\/fbs-ticker> (AAPL)<\/strong> yields a mere 0.6%, while Microsoft
\n
\n MSFT
\n <\/fbs-ticker> (MSFT) <\/strong>isn\u2019t much better, at 1%. So how is QYLD throwing off all that income?<\/p>\n

It creates a \u201csynthetic yield\u201d by selling at-the-money call options on the Nasdaq-100 Index itself.<\/p>\n

This kind of strategy is an absolute grind, which is why I don\u2019t recommend sitting around and trying to sell covered calls on 100 stocks all by yourself. And you don\u2019t have to\u2014you can save yourself the time by outsourcing it to Global X.<\/p>\n

The idea behind this strategy is to enjoy some<\/em> of the performance of the Nasdaq-100, but with less volatility and with most of the returns coming from generous monthly distributions. It\u2019ll lag during up markets but protect your backside during downturns.<\/p>\n

JPMorgan Nasdaq Equity Premium Income ETF (JEPQ)<\/strong><\/p>\n

Dividend Yield:<\/strong> 11.1%<\/p>\n

The JPMorgan Nasdaq Equity Premium Income ETF (JEPQ)<\/strong> is an ETF that has roughly the same thrust as QYLD, but with three meaningful differences.<\/p>\n

JEPQ buys Nasdaq-100 stocks, but not all<\/em> of them\u2014for instance, it only holds one Alphabet (GOOG)<\/strong> share class\u2014and not at the same weights as the QQQ.<\/p>\n

While it sells one-month covered calls, it does so with out-of-the-money options.<\/p>\n

And whereas QYLD is tethered to an index, JEPQ is actively managed (though interestingly, much cheaper, at 0.35% annually versus QYLD\u2019s 0.60%.<\/p>\n

The fund has only been around since May 2022, but so far, its results compared to QYLD are promising.<\/p>\n

Nuveen Nasdaq 100 Dynamic Overwrite Fund (QQQX)<\/strong><\/p>\n

Dividend Yield:<\/strong> 8.4%<\/p>\n

Another actively managed fund with a similar bent is the Nuveen Nasdaq 100 Dynamic Overwrite Fund (QQQX)<\/strong>. The fund also buys Nasdaq-100 stocks, then sells covered calls on 35% to 75% of the notional value of the fund\u2019s equity portfolio.<\/p>\n

What makes QQQX stick out is that it\u2019s a closed-end fund, which gives it a significant advantage.<\/p>\n

One drawback of selling covered calls is that it can weigh on returns over the long haul because the fund\u2019s best performers rise to the option-selling price and get sold, or \u201ccalled away.\u201d But pushing against that is the fact that QQQX is trading for a significant discount to its net asset value (NAV)\u2014something ETFs don\u2019t do.<\/p>\n

Right now, QQQX is trading for an 8%-plus discount, whereas the fund has, on average, traded at a slight premium over the past five years.<\/p>\n

What\u2019s also nice is that if volatility continues, the covered-call strategy will make the dividend even safer. That\u2019s because QQQX\u2019s options are likely to expire worthless, letting the fund keep its holdings and the premium it sells option buyers, too.<\/p>\n

Brett Owens is chief investment strategist for <\/em>Contrarian Outlook<\/em>. For more great income ideas, get your free copy his latest special report: <\/em>Your Early Retirement Portfolio: Huge Dividends\u2014Every Month\u2014Forever.<\/p>\n

Disclosure: none<\/em><\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

This entire market meltdown has been based off of a flawed premise. We income investors must take advantage of it, before sanity…<\/p>\n","protected":false},"author":1,"featured_media":6713,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25],"tags":[],"class_list":{"0":"post-6712","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets"},"yoast_head":"\nHow To Play A Bounce In Tech With Dividends Up To 12% | inFundPros<\/title>\n<meta name=\"description\" content=\"This entire market meltdown has been based off of a flawed premise. We income investors must take advantage of it, before sanity returns to the markets.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/infundpros.com\/?p=6712\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How To Play A Bounce In Tech With Dividends Up To 12% | inFundPros\" \/>\n<meta property=\"og:description\" content=\"This entire market meltdown has been based off of a flawed premise. We income investors must take advantage of it, before sanity returns to the markets.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/infundpros.com\/?p=6712\" \/>\n<meta property=\"og:site_name\" content=\"inFundPros\" \/>\n<meta property=\"article:published_time\" content=\"2023-10-29T12:15:44+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-10-29T12:15:45+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/1698581745_0x0.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1350\" \/>\n\t<meta property=\"og:image:height\" content=\"900\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Press Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Press Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/infundpros.com\/?p=6712#article\",\"isPartOf\":{\"@id\":\"https:\/\/infundpros.com\/?p=6712\"},\"author\":{\"name\":\"Press Room\",\"@id\":\"https:\/\/infundpros.com\/#\/schema\/person\/87f7e632b195ea95c91503d9281f5eff\"},\"headline\":\"How To Play A Bounce In Tech With Dividends Up To 12%\",\"datePublished\":\"2023-10-29T12:15:44+00:00\",\"dateModified\":\"2023-10-29T12:15:45+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/infundpros.com\/?p=6712\"},\"wordCount\":913,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/infundpros.com\/#organization\"},\"articleSection\":[\"Markets\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/infundpros.com\/?p=6712#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/infundpros.com\/?p=6712\",\"url\":\"https:\/\/infundpros.com\/?p=6712\",\"name\":\"How To Play A Bounce In Tech With Dividends Up To 12% | inFundPros\",\"isPartOf\":{\"@id\":\"https:\/\/infundpros.com\/#website\"},\"datePublished\":\"2023-10-29T12:15:44+00:00\",\"dateModified\":\"2023-10-29T12:15:45+00:00\",\"description\":\"This entire market meltdown has been based off of a flawed premise. We income investors must take advantage of it, before sanity returns to the markets.\",\"breadcrumb\":{\"@id\":\"https:\/\/infundpros.com\/?p=6712#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/infundpros.com\/?p=6712\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/infundpros.com\/?p=6712#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/infundpros.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"How To Play A Bounce In Tech With Dividends Up To 12%\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/infundpros.com\/#website\",\"url\":\"https:\/\/infundpros.com\/\",\"name\":\"Fintech Advance\",\"description\":\"Latest Finance and Tech News and Updates\",\"publisher\":{\"@id\":\"https:\/\/infundpros.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/infundpros.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/infundpros.com\/#organization\",\"name\":\"Fintech Advance\",\"url\":\"https:\/\/infundpros.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/infundpros.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/tech-logo.png\",\"contentUrl\":\"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/tech-logo.png\",\"width\":409,\"height\":70,\"caption\":\"Fintech Advance\"},\"image\":{\"@id\":\"https:\/\/infundpros.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/infundpros.com\/#\/schema\/person\/87f7e632b195ea95c91503d9281f5eff\",\"name\":\"Press Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/infundpros.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/avatar_user_1_1697230663-96x96.png\",\"contentUrl\":\"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/avatar_user_1_1697230663-96x96.png\",\"caption\":\"Press Room\"},\"sameAs\":[\"https:\/\/infundpros.com\"],\"url\":\"https:\/\/infundpros.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"How To Play A Bounce In Tech With Dividends Up To 12% | inFundPros","description":"This entire market meltdown has been based off of a flawed premise. We income investors must take advantage of it, before sanity returns to the markets.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/infundpros.com\/?p=6712","og_locale":"en_US","og_type":"article","og_title":"How To Play A Bounce In Tech With Dividends Up To 12% | inFundPros","og_description":"This entire market meltdown has been based off of a flawed premise. We income investors must take advantage of it, before sanity returns to the markets.","og_url":"https:\/\/infundpros.com\/?p=6712","og_site_name":"inFundPros","article_published_time":"2023-10-29T12:15:44+00:00","article_modified_time":"2023-10-29T12:15:45+00:00","og_image":[{"width":1350,"height":900,"url":"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/1698581745_0x0.jpg","type":"image\/jpeg"}],"author":"Press Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Press Room","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/infundpros.com\/?p=6712#article","isPartOf":{"@id":"https:\/\/infundpros.com\/?p=6712"},"author":{"name":"Press Room","@id":"https:\/\/infundpros.com\/#\/schema\/person\/87f7e632b195ea95c91503d9281f5eff"},"headline":"How To Play A Bounce In Tech With Dividends Up To 12%","datePublished":"2023-10-29T12:15:44+00:00","dateModified":"2023-10-29T12:15:45+00:00","mainEntityOfPage":{"@id":"https:\/\/infundpros.com\/?p=6712"},"wordCount":913,"commentCount":0,"publisher":{"@id":"https:\/\/infundpros.com\/#organization"},"articleSection":["Markets"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/infundpros.com\/?p=6712#respond"]}]},{"@type":"WebPage","@id":"https:\/\/infundpros.com\/?p=6712","url":"https:\/\/infundpros.com\/?p=6712","name":"How To Play A Bounce In Tech With Dividends Up To 12% | inFundPros","isPartOf":{"@id":"https:\/\/infundpros.com\/#website"},"datePublished":"2023-10-29T12:15:44+00:00","dateModified":"2023-10-29T12:15:45+00:00","description":"This entire market meltdown has been based off of a flawed premise. We income investors must take advantage of it, before sanity returns to the markets.","breadcrumb":{"@id":"https:\/\/infundpros.com\/?p=6712#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/infundpros.com\/?p=6712"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/infundpros.com\/?p=6712#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/infundpros.com\/"},{"@type":"ListItem","position":2,"name":"How To Play A Bounce In Tech With Dividends Up To 12%"}]},{"@type":"WebSite","@id":"https:\/\/infundpros.com\/#website","url":"https:\/\/infundpros.com\/","name":"Fintech Advance","description":"Latest Finance and Tech News and Updates","publisher":{"@id":"https:\/\/infundpros.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/infundpros.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/infundpros.com\/#organization","name":"Fintech Advance","url":"https:\/\/infundpros.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/infundpros.com\/#\/schema\/logo\/image\/","url":"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/tech-logo.png","contentUrl":"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/tech-logo.png","width":409,"height":70,"caption":"Fintech Advance"},"image":{"@id":"https:\/\/infundpros.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/infundpros.com\/#\/schema\/person\/87f7e632b195ea95c91503d9281f5eff","name":"Press Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/infundpros.com\/#\/schema\/person\/image\/","url":"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/avatar_user_1_1697230663-96x96.png","contentUrl":"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/avatar_user_1_1697230663-96x96.png","caption":"Press Room"},"sameAs":["https:\/\/infundpros.com"],"url":"https:\/\/infundpros.com\/?author=1"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/posts\/6712","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/infundpros.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6712"}],"version-history":[{"count":1,"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/posts\/6712\/revisions"}],"predecessor-version":[{"id":6714,"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/posts\/6712\/revisions\/6714"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/media\/6713"}],"wp:attachment":[{"href":"https:\/\/infundpros.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6712"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infundpros.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6712"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infundpros.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6712"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}