Functionally, these ETFs pay you back your own capital and call it “Yield”. Income will shrink over time for long term investors as principal erodes as a result of the funds’ flawed underlying mechanics. In reality, these funds don’t offer much to investors in terms of portfolio construction efficiency. It’s time to dump these funds in the trash and wait for better products from ETF companies that allow for more discretion in managers’ decision making.
QYLD ETF: The Yield Is A Mirage (NASDAQ:QYLD)
Functionally, these ETFs pay you back your own capital and call it “Yield”. Income will shrink over time for long term investors as principal erodes as a result of the funds’ flawed underlying mechanics. In reality, these funds don’t offer much to investors in terms of portfolio construction efficiency. It’s time to dump these funds in the trash and wait for better products from ETF companies that allow for more discretion in managers’ decision making.