I have seen a lot of CC ETFs being compared to the TSX60 SP500 NASDAQ etc but it’s important to compare apples to apples not apples to oranges and the odd banana. I know that using a comparable CC ETF Vs another levered ETF can sometimes boil your beans but this will not be the case. The data being used is from global X inception date after that switched from Horizon. May 2024. We are using 4 apples 🍏 Index 🍏 CC (covered call) 🍏 CL (covered call with leverage) 🍏 L (leverage) Let’s always use the 🍏 index as the reference point or standard total return. The first example is the NASDAQ 100 🍏 QQCC has underperformed its 🍏 index by 4% but once you apply 🍏 QQCL with leverage, you outperform the 🍏 index. OK settle down, we’re not done yet!!! When you look at the 🍏 QQQL you outperform the 🍏 index by 8%. I added a Canadian NASDAQ 100 favourite QQC. The second example is the SP500 🍏 USSX which has similar results and I added another Canadian favourites as reference in VFV. We are not done yet because if it was that simple any levered CC ETF would outperform any index right? The banking comparison it’s not even close. The 🍏 L is 27% above its 🍏 index. The 🍏 CL 25% behind the 🍏 index. The 🍏 CC is 38% behind the 🍏 index. The last comparison is the TSX60 and I added Canadian favourite XIC. 🍏 CANL has the best performance but I couldn’t get it to register on the chart. When you’re comparing apples to apples, one thing is true on every chart and others charts I have done. The 🍏 CC always underperforms the 🍏 index but once leverage has been applied. The 🍏 CL can compete with the index which includes all applicable fees. But but this is not true for every index and for every provider. Always do your own research and analysis so you pick your apple wisely or you may end up with a pineapple I am an incomewealthinvestor and I hold USCL QQCL ENCL CANL QQQL HEQL
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Rabid Money Badger
@riggs · 10mo
I like this post. I’m used to seeing people measuring bananas instead of focusing on their goals.
yield
@yield · 10mo
Great explanation 👍 I love 25% modest leverage on CC
