QQQ VS YMAX VS YMAG VS FEPI VS AIPI VS QDTE WHO WINS IN TOTAL RETURN?

Summary

In this video, the Working Investor compares several tech-focused income ETFs to the NASDAQ 100 (QQQ) benchmark. The analysis covers funds like FEY, AIPI, YMag, YMax, and QDT, focusing on their total returns over the past five months. While AIPI, an AI-focused fund, outperforms with a 15.29% return, QDT, using a zero-day expiration strategy, also delivers impressive returns. The video helps investors understand the trade-offs between income and growth strategies, highlighting risk-adjusted returns, performance metrics, and strategies to optimize tech-focused ETF investments.

Takeaways

• 😀 Comparison of large tech income-based ETFs with the NASDAQ 100 (QQQ) benchmark.
• 😀 Focus on total return performance as the primary metric for ETF comparison, not just dividend yield.
• 😀 Discussion on whether income-based ETFs can provide the same or better total returns compared to the NASDAQ 100.
• 😀 The video highlights the importance of looking at risk-adjusted returns, especially for funds focused on specific sectors like AI or the 'Magnificent 7'.
• 😀 Fey (FEPP) underperformed the NASDAQ 100 in the period analyzed, with a total return of 8.35% vs. QQQ's 11.65%.
• 😀 AIPI, an AI-focused ETF, outperformed other funds with a total return of 15.29%.
• 😀 Y Max (YMAX), which includes a mix of various sector ETFs, returned 12.45%, with exposure to both tech and alternative sectors like Bitcoin and gold.
• 😀 QDT, which implements zero-day to expiration options strategies, returned 14.75%, offering a higher total return compared to the QQQ.
• 😀 Covered call strategies, like those used by Fey and AIPI, generate income by writing options on underlying stocks, but they may impact overall total returns depending on the market conditions.
• 😀 The video introduces GX, a global income ETF, which closely tracks the Vanguard Total World Index (VT), offering global exposure with an income component, and slightly underperforming VT in total return.

Q & A

What is the primary focus of this video?

The video compares large-tech, income-based ETFs to the NASDAQ 100 (QQQ) benchmark, specifically analyzing their total return performance and how they generate income, using funds such as FEPP, AIPI, YMax, and QDT.

What time period is used for the comparison of these ETFs?

The video compares the ETFs over a five-month period, from June 4, 2024, to November 23, 2024.

How does the income generation strategy of these ETFs work?

The ETFs use options strategies like covered calls and credit spreads to generate income. Funds such as FEPP focus on selling covered calls, while others, like GIAx, use credit spreads to derive income from underlying stocks.

Why did FEPP underperform compared to the NASDAQ 100?

FEPP underperformed the NASDAQ 100 during the examined period, achieving a return of 8.35% compared to QQQ’s 11.65%. This is attributed to its specific options strategy and monthly rebalancing, which may have limited its total return potential.

Which ETF was the best performer in this comparison?

AIPI, which focuses on AI stocks, was the best performer, with a total return of 15.29%, surpassing the NASDAQ 100 benchmark.

What is the strategy behind the QDT ETF, and why did it perform well?

QDT uses a zero-day-to-expiration (zero DTE) options strategy, which allows it to collect high premiums from options close to expiration. This nimble approach helped it achieve a 14.75% total return, making it one of the top performers in the comparison.

What does YMax focus on, and how does its performance compare to others?

YMax focuses on the 'Magnificent 7' tech stocks (Apple, Amazon, Microsoft, etc.) and uses an income-based strategy with weekly distributions. It achieved a total return of 13.89%, outperforming the NASDAQ 100 but underperforming AIPI and QDT.

How does the income generation model differ between YMax and QDT?

YMax generates income through weekly distributions based on its holdings in the Magnificent 7 tech stocks, while QDT uses a more aggressive strategy involving zero-day-to-expiration options, collecting premiums more frequently for potentially higher returns.

What is the risk profile of the YMax ETF compared to others?

YMax carries a different risk profile because it focuses on a concentrated group of seven tech stocks, exposing it to higher volatility in that sector. In contrast, other ETFs like QDT and FEPP have more diversified holdings, which may reduce risk.

What are the tax implications of these income-based ETFs?

Some of these ETFs have different tax structures. For example, some funds distribute income as return on capital or through long-term capital gains, while others might have a higher proportion of short-term capital gains. It's important to consult with a tax advisor to understand how each fund's distribution might affect your tax situation.