Should I Buy This COVERED CALL Dividend Stock ETF?

[@ppcian]

IMPORTANT ANNOUNCEMENTS: Thanks for watching! Please don't forget to "like" and "subscribe". Please let me know in the comments below what you think about my latest portfolio update. HELPFUL RESOURCES: Here's my recent PPC Ian dividend stock portfolio update: kzbin.info/www/bejne/pauxho2NZbSNoKMsi=jzNn3Tnf-E_iJQKD Here's my strategy of blending SCHD with BTI (a high-yielder) to improve my overall dividend stock portfolio yield AND dividend CAGR: kzbin.info/www/bejne/q4G1qGBrZpKdpKMsi=9crOBTrAtbe1W3Jf I used to own XYLD, but I sold it. (I do think DIVO better suites my investment style, overall.) Here's an historical XYLD video: kzbin.info/www/bejne/e3i5gahmmLN6ppIsi=9t_3SPJQBQNs9sj2 CHECK OUT MY PATREON: I'm sharing exclusive bonus content over on Patreon! I offer two tiers: Backyard Patreon and Corner Patreon. My Backyard Patrons see my stock trades, each accompanied by a blog post write-up. They also have access to 50 historical Patreon-exclusive videos. In addition to all Backyard Patron perks, my Corner Patrons also have access to my complete dividend stock portfolio (% allocation to each position) AND my complete bond portfolio (% allocation to each position). They additionally enjoy exclusive portfolio update videos, Corner Patreon virtual meet-ups, and more. Head on over to Patreon to join today: www.patreon.com/ppcian PPC IAN INSTAGRAM: I'm sharing some great content over on Instagram. Check out my Instagram stories and reels. I'm @ianlopuch: instagram.com/ianlopuch/ PPC IAN EMAIL LIST: Join my email list today for helpful updates, and a look at some of my historical dividend stock portfolios: www.ppcian.com/my-complete-dividend-stock-portfolio/ PPC IAN TWITTER: I'm always sharing fun updates on Twitter. Here's my dividend investing Twitter (I'm @ianlopuch): twitter.com/ianlopuch COOL DIVIDEND INVESTING MERCH: I offer some really amazing dividend investing merch: teeshirts, hoodies, mugs, and more! The designs are super stylish and on-point for the dividend stock investing community. Each purchase supports my KZbin channel: teespring.com/stores/ppcian Thanks so much, everyone, for your support. I hope you enjoy the video today! (Disclosure and Disclaimer: I'm long SCHD and BTI. Please see video description for all disclosures and disclaimers.)

[@HermannTheGreat]

Wouldn't you be better with JEPI? Great downside protection and yield 3% higher than Divo.

[@jeonacho]

glad you still upload bro. You the goat

[@ppcian]

Your kind words truly mean the world, my friend! I plan to keep uploading for a very long time. I enjoy it so much, and this community truly means the world to me. Thanks for taking the time to watch!

[@weihuang-u9q]

Good video, I love DIVO Im investing a lump sum this week. What would be the best 5 etfs for a foreign beginner

[@ppcian]

Thanks for sharing! Wishing you all the greatest!

[@jasminemccumber4694]

In no order: 1) VOO 2) QQQM 3) SCHG/VUG 4) VTI 5) SCHD/DGRO. Personally I put down 1.3m$ on few ETFs, still diversifying. It was this time last year I made my huge break through with a liquid 200k. handed it to a Pro here in FL, I get weekly pay out which I put back on long term ETF's. Tesla will be a huge buy for me when the market bottoms.

[@weihuang-u9q]

Thank you, I already added VOO and QQQM, can you share this Pro with me

[@jasminemccumber4694]

Yeah, Diana Leayani Lara use her name to look her up

[@harlibassham8187]

I have heard other brokers speak of her good works in the industry

[@sofakinginsane]

I like DIVO a lot. Also have IDVO for International exposure and has a higher yield(and expense ratio). Thanks for the vid!

[@ppcian]

Thanks for sharing!!!

[@roberttaylor3594]

A covered call etf that also has growth! Sounds good!!

[@ppcian]

Right? It's a rare thing, indeed. I am impressed with DIVO!

[@roberttaylor3594]

@@ppcian it’s the kind of thing, as a Canadian, I would consider for my RRSP. No tax deduction on US holdings, and I’d leave it there for 10 years.

[@MixedUpSiciiano]

I've owned JEPI and NUSI for a few years, and I recently bought a few shares of YMAX. The monthly dividends/distributions are amazing and have really helped compound my portfolio quickly. There are downsides (higher expense ratios, higher taxes, less predictable payouts), but for me the benefits win out.

[@MartinD9999]

DIVO, SCHD, JEPI, JEPQ & QQQM create my core. (A bit of overlap, I get it). Covers Bull, Bear and stagnant markets. Everything else in my portfolio is just my extra plays.

[@03c5z]

2-3% of the DIVO yield is from actual dividends. The other 2-3% is from options income. You could have increasing dividends but falling options premium in a bull market. That can make your "dividend" (distribution) growth rate look flat or even fall. I think the distributions will increase slightly long term, but I would look at it as more of a growth position with enhanced income and lower volatility. It has out performed SCHD over the past few years and has a higher current yield. Personally I own both so it isn't a knock on SCHD.

[@ppcian]

Great insights! I like how you are looking at it! Thanks for sharing! (Disc: I’m long SCHD)

[@andrebrownakanewworldorder]

I only have 5 individual stocks left in my portfolio and switched to a etf index portfolio my favorite US dividend growth funds are CDC, PEY , DHS, VTI , PPTY, LVHD/ International VXUS , IDVO, UIVM, FYLD. My high yield portion of my portfolio is GPIQ, ISPY , JEPI/JEPQ, SPYI , QQQI, STK, FEPI, AIPI ,SPYT,QQQT, QDTE, SVOL ZIVB. Even though most of my high yield covered call funds are new these are holding their NAV to at least flat and most are having NAV growth. Keep up the great work ppcian I enjoy your videos!

[@tradingfundamentals]

I love that you're covering more ETF insights! I think you may like FTHI and KNG. Share price is not eroding and their dividends have been stable or growing.

[@ppcian]

Thanks for your kind words and thanks for sharing!

[@antoniosantiago9794]

DIVO IS THE WAY TO GO......THANKS!

[@ppcian]

Thanks for your comment!

[@extremecarpetcleaning-wvwi86]

Jepq seems to be doing pretty good so far. 12 percent yield monthly.

[@BaldheadMedic]

I've held DIVO for years and I exchanged it for QYLG and XYLG which is so similar to your former holding in XYLD but the global x YLG funds always hold 50% of the underlying index for appreciation and 50% as at the money covered calls I love my experience holding qylg and xylg. QYLG in particular did well in distribution and capital appreciation

[@ppcian]

Great insights!!! Thank you for sharing. I look forward to taking a look at these.

[@BaldheadMedic]

YLG's both yield about 5-6% when I held DIVO it yielded 4-5% the cool thing about divo is it had more qualified dividends but it still was majorly covered calls taxed as ordinary income. I like things more simple as I walk this journey. holding 50% in the nasdaq 100/SP 500 for growth and 50% covered calls is simple to understand. The "downside" is the AUM QYLG is 110 million and XYLG is 81 million. But global x stuck by these funds and even made an rylg for the russel 2000. Ian God bless you from philly. Your friend Chris

[@erickSPY777]

If QYLG & XYLG had billions in assets & millions in trading volume I would probably invest.

[@mikejmarvin]

I love divo. I've got about 300 shares

[@ppcian]

Right on!!! Thanks for sharing!

[@kg3436]

The options premium is affected by a lot of different factors including volatility like you said but in general it should go up over time as the fund's nav goes up. In the case of DIVO, calls are written out of the money so there is potential for modest capital appreciation. If the underlying stock is performing well and calls are written out of the money then you should see a growing nav even with covered call funds that classify a portion of their distributions as return of capital (which is very much so tax advantageous). CC funds get a bad name because many of them are overly aggressive with their options layer or they pay out big distributions that aren't fully supported by their CC income which can be destructive to nav but the right CC fund can be a great way to add tech exposure while providing a good blend of yield and capital appreciation for a nice healthy total return over time.

[@ppcian]

Very insightful comment! Thank you for sharing!!!

[@j.s.2767]

i've been in divo for like 4 years. ppl always trash this etf (cause the expense ratio is a little high), but its been a solid performer throughout the recession and downtrends.

[@ppcian]

Thanks for sharing! Thanks for sharing your real world experience.

[@erickSPY777]

DIVO is my fav covered call ETF

[@chriswoollet]

Thank you for your insight on this one Ian. Always appreciate your input

[@ppcian]

Thanks for your very kind words!

[@DividendStockpile]

Divo is 1st class! Love it

[@ppcian]

Thanks, my friend! Always appreciate your comments (and VERY long-time support)! Hope you have a super weekend.

[@rahulparikh6183]

Love your channel Ian - long term dividend investing is so legit!

[@ppcian]

Always appreciate your support, my friend!!!

[@12thejesus]

Divo is Great! On KZbin, toby Mathis interviews Kevin Simpson the person with Capital Wealth Preservation (CWP). Really opened my eyes to this etf. Great interview and great video here.

[@ppcian]

Thanks for sharing! I look forward to checking out the interview!

[@MartinD9999]

@12thejesus Thanks for sharing that interview

[@philipwebb5065]

Informative video, DIVO normally has a slightly lower BETA and slightly different tax structure if not in and IRA etc. Own both in different accounts for different reasons and consider both core holdings.

[@ppcian]

Thanks for your kind words! Thanks for sharing!

[@n1chr0me6]

It's instrumental to calculate how many years it will take your portfolio yield to catch up with the slower growing yield of divo.

[@ppcian]

Agreed! Thanks for sharing!

[@LXBalla4414]

I've been investing in dividend stocks for a few years now, but as I get older, I'm finding myself being more drawn to low-cost high div yield ETFs. Sadly over here in Europe we don't have all the same ETFs as over there, so I'll invest in Blackrock Ishares ETFs mostly.

[@reptilianskin]

Great video. I never considered adding a covered call ETF or other high yielding products. I suppose it’s because I prefer simple dividend stocks and ETFs. I understand them better and have a higher comfort level. I do have an average portfolio yield of over 4.5% but that is mainly because a lot of Canadian dividend stocks are yielding in that area.

[@ppcian]

Thanks for sharing and thanks for your longtime support!

[@theyuha]

I have some DIVO, the chart looks good over the long term.

[@ppcian]

Agreed! Fabulous chart, indeed! Thanks for sharing

[@psr076]

I’ve heard of Divo. I was considering it but I just started not long ago a Schd position. In my retiring portfolio.I’m trying to go for more growth position. In my other portfolio I have some cleaning to do. It’s o my watchlist

[@ppcian]

Thanks for sharing! (Disc: I’m long SCHD)

[@zacharywickham3377]

They are newer, but I like the covered call ETFs XDTE and ISPY. Each ETF sells daily call options on the S&P 500. XDTE pays weekly dividends and yields 26.11% as of 6/30/24. ISPY pays monthly dividends and currently yields 12.48%.

[@ppcian]

Thanks for sharing!

[@jgp5378]

Thanks for the video. I have been researching the same things for years. I have come up to my own conclusion. Just equal weight SCHD and DGRO. When you look at their dividend growth rates they are the clear winners for dividend growth investing.

[@ppcian]

Thanks for sharing!!! (Disc: I’m long SCHD)

[@PsychoGilgamesh]

I've started simplifying my portfolio. Weekly I auto buy $25 of VIG, SCHD, JEPI and JEPQ. I've got some DIVO but sadly Etrade doesn't allow it to be auto purchased.

[@ppcian]

Thanks for sharing! (Disc: I’m long SCHD)

[@etfeasy]

DIVO is still treated as Active managed compared to SPYI which is passive index S&P 500 correlated

[@str8chillaxin]

SPYI 👍

[@andreamugnai2937]

Hey Ian, you are so awesome, been watching you regularly for years! Why not write out of the money CC yourself on your existing positions? Thanks

[@dakkon74]

DIVO is a solid fund, but I have not been thrilled that they have been holding about 13% in cash for the longest time now. I can hold cash on my own, without paying the 0.56% exp ratio.

[@ppcian]

Thanks for sharing! Great point!

[@MartinD9999]

@dakkon74 Good point. Maybe they’re holding it down that perfect Call 😂

[@YusifRefae]

Love your videos and I would love to hear your thoughts on what’s the best way for someone like me to start up a finance channel on YT? I do music on here but also have an MBA from BU and would love to hear your thoughts and advice for how I might get into this YT finance channel game, if you ever get the chance. I’ve had some thoughts about what type of finance content to make, but you’re really doing it, and doing very well, so I figured why not ask the man himself! I think part of it is your open and friendly confident presentation style, and I'm going to be working hard on improving that. And also consistency. You work hard at every video and keep them coming over the years, it's impressive. Have a wonderful day my friend thanks for sharing all your investing inspiration and knowledge.

[@tannershore2937]

Is that a $SBUX Maui mug in the back?? I have one too!

[@ppcian]

Yes, sir!!! I love my Starbucks merch. Great eye for detail, my friend! (Disc: I’m long SBUX)

[@etfeasy]

SPYI will give you much higher yield and less volatility but minimum growth

[@etfeasy]

Buy SPYI instead It’s the best in total returns along with JEPQ

[@Shipwrecked_traveler]

Ian, do you use selling puts to get into stock positions? I use them to get into and out of Altria (MO). Secondly, do you use covered calls to churn out extra revenue?

[@roberttaylor3594]

watching this again. I wonder what the CAGR of the dividends of the top ten holdings were in those years?

[@ppcian]

Yes, that would be an interesting analysis! Thanks for watching!

[@roberttaylor3594]

@@ppcian looks like the top three have pretty good CAGR...so is the ETF buying more stocks rather than paying out everything in distributions? I don't know how to figure that out. How many shares of Home depot it had 5 years ago vs today, for example.

[@markmethner8839]

Still have XYLD. Only 1% position and up 11%. Reinvest my dividends back into fund

[@ppcian]

Thanks for sharing! I’ve still got XYLD on my watchlist wishing you a super weekend!

[@fcamargo84]

Watching from Brazil 🇧🇷 What do you think about VYM EFT? I do have SCHD

[@foodguy3435]

I personally wouldn’t go into divo due to the expense ratio. That will really eat into your dividend returns over time.

[@ppcian]

Thanks for sharing!

[@TheDGICrab]

There's a TON of crummy yield traps in the covered call ETF space. DIVO is not one of them. Nice yield, pays monthly and actually has share price appreciation. I wouldn't buy it as a young investor but for current income seekers it's a fine add!

[@ppcian]

Agree! Great thoughts!

[@leepickell]

I totally don’t agree with that. I think small positions (five shares) of things like DIVO and SCHD are great ideas for young investors. Obviously, hit QQQM, VOO, V, COST, GOOG for youth…but dang the Yield on Cost when the 25 year old turns 65…..

[@stewartcampbell9906]

I like VYM and JEPI.

[@ericthornton5252]

The two biggest etfs of mlp’s pay over 7% with no taxes for about 15 years and not at the tippy top of its chart. Also they issue a w-2 so an accountant favorite. Mlpa and amlp

[@ppcian]

Thanks for sharing! Look forward to taking a look!

[@moneekdilawari4508]

Look into ISPY and IQQQ as well

[@Therealjefflong]

I started my divo position one month ago, up to 43 shares

[@ppcian]

Right on! Thanks for sharing!

[@davidhalbleib2467]

Have you ever looked into the tech CEF BST? If so what are your thoughts?

[@ppcian]

Have not looked at that one, but will add to my list. I’ve been thinking once I get my SCHD position to-size that I’ll possibly add a CEF. One CEF that’s high on my watchlist is FOF because it offers broad exposure to many CEFs. I have a lot more to learn about CEFs. Wishing you all the greatest!

[@davidhalbleib2467]

@@ppcian it holds a lot of large cap tech. Not a lot of growth but decent income 7-8%. They've given out special dividends/distributions in the past as well. I think it's worth the look if you have a niche you need to fill. Thanks for cranking out the content man. I always look forward to your videos.

[@extremecarpetcleaning-wvwi86]

Yeildmax fund are 50 percent yields but scary to put much into. I'm trying ymax fund of funds. So far its been good, but to new to tell. Ive only put a few grand in it. I'll sell if it starts eroding my capital to much. Ive been making 70 dollars a month and just reinvesting it back into it. Only time will tell. If it seems to good to be true it probably is.

[@blackfiree91]

LOL @ LV bag. Coulda been more shares. You got conned

[@Sylvan_dB]

I don't think that good dividend stocks make good covered call stocks because they are typically lower volatility. I prefer the NEOS approach used in SPYI and QQQI. I own both of those and I am watching IWMI (it's brand new, still tiny). TL;DR the prospectus: The fund owns the stocks in its respective index, but they write calls on the index itself which allows them to classify the income as 60% long term gains and 40% short term gains. They also might do selective tax loss harvesting which allows them to classify some of the distribution as return of capital (delaying taxes until you sell shares, at which time long/short term is up to you). I limit my "yield" positions currently to less than 15% of my portfolio and ccall is part of that (along with tobacco and REITs). I don't expect a lot of growth from these, hence held for "yield."

[@ammart5240]

Why not considering JEPQ, less expansive (Expense Ratio = 0.35%) , Higher Yield 9.07%, higher YTD performance 10.13%

[@HermannTheGreat]

Is starbucks stock still a big holding?

[@ppcian]

Yes, it is. Typically, I buy and hold “forever”. I had been thinking about adding more, but am now waiting due to the sudden run-up on Friday. I believe you have been critical of my SBUX position in the past. That is fine. I am invested for the long-term (decades), and I believe they will do quite well. I do not mind short-term challenges they are facing/overcomimg. (Disc: I’m long SBUX)

[@HermannTheGreat]

@@ppcian Thank you for responding Ian. I'm worried they won't recover from the current cultural change for mid-level earners to cut back on wants based spending or choosing alternatives. Their new CEO seems out of touch and they're throwing out coupons and discounts like a fire-sale in hopes of bringing back long-time customers but I'm not sure it will work. Many coffee drinkers I know purchase from alternative smaller franchise shops as much as they purchase Sbux. Indepdent coffee shops are also setting up in hospitals and close to hotels and office parks which are taking their business. It looks like you've started chasing yield more the last several months, and most of this FOMO and worry about keeping up with returns from growth could be offset by utilizing a growth fund position. Tech is going to keep climbing because it's as good a value as the blue-chip dividend payers in the 20's P/E range currently, and the large tech companies will continue to dominate for decades. I'm sure you make a large income but you're paying taxes on all the dividends and have been switching in and out of positions over the last year. Consider some growth maybe?

[@HermannTheGreat]

@@ppcian I sent you a longer message but it didn't appear which is strange. I think starbucks has quite a challenging future and their brand loyalty has shifted, including an out of touch CEO as evidenced on the Cramer interview a few months ago, hence all the discounts and coupons currently which are eating into profits. Have you considered adding tech growth into your portfolio for a small portion? Any of the Mag 7? It could offset some of this need for high yield.

[@metalmanmike3815]

Ian you must Whip It..Whip It Good! 🤪

[@metalmanmike3815]

P.S...keep up the good work...I love your everyday man analytical analysis of why and when you are considering and or buying/bought stocks.

[@moresugartradercc2744]

I had this one but I sold it didn't feel it was diversied enough they write options up to 20 percent leaving 80 percent to grow

[@ppcian]

Many thanks for sharing! Always appreciate your comments!

[@moresugartradercc2744]

They use all the dividends to provide income they also target a yield of of 5 percent so when the dividends are raised they just do less options to provide the 5 percent yield

[@ppcian]

Very insightful! Thank you for sharing. That is a great point as to why the CAGR is not higher!

[@Norfolkpaul]

Nice video 😊 not for me being bit older 😅

[@rodrain2]

Divo, had a cut of 39% in 2019 that skews that 5 year average. The 2 years before it went up 87% and 26% and it had 13.7 increase the year after. Just saying.

[@ppcian]

Thanks for sharing! Helpful data points!

[@YusifRefae]

Ian, why not write the covered calls yourself, to generate extra cashflow? I assume you’re worried about losing your shares, the potential tax implications of assignment. In that case, just use schwab's platform to assess the risk of assignment of each contract. You could be super conservative. For example, a 1-month call option with a strike price way out of the money (far above your cost basis) with a 5-6% probability of expiring in the money. The premiums you receive for that are not a huge cashflow, but if you have enough shares, they start to add up. You can also cycle back and write puts on the shares that got assigned. It’s better than putting the decisions in someone else’s hands imo. I understand if you’re too busy to manage an options portfolio, given all the work you do!! Personally, I have the time to do so, and I enjoy the work, so it’s just my opinion here, to each his own

[@leepickell]

I have a position in CMCSA that I’m slightly down on (41.15 cost), I write CC monthly at about 15 delta. I put 12 bucks of the premium (about 30 bucks) back into CMCSA. That takes the stock from a 1.24 dividend .31x4….Now I get that plus 1.44 per year of premium added back in. 2.68 per share on 41.15 cost basis…6.68 yield on CMCSA.

[@killersentra]

Had it a short time ago. Bailed because SCHD was stealing all our customers.

[@ppcian]

Thanks for sharing! (Disc: I’m long SCHD)

[@BryanColliver]

the taxes dont work for me

[@justinshearer8180]

Covered call ETS are not gonna have any dividend growth because they are actually distributions from the premium that’s based off the volatility so it will just go up and down over the years and decades from now it will basically be around flat I think you’d be better off finding stocks. They have over 4% dividend yield even if they’re only growing 3 to 5% a year at least they would be compounding. Reits are a great bargain right now I got Adc yields 4.5% in grows dividend by about 6.5%. Something if you’re looking mostly for yield is Londel Basel yields about 5.5% and grows around 4 to 5% per year however not much appreciation but some.

[@ppcian]

Great insights, and thank you for sharing! Since this ETF holds an actual basket of dividend stocks (in addition to writing selective covered calls), I had suspected I'd see some level of distribution growth over the years that would be higher then the numbers over the the last 5 years. I do think you're right. It must just be that the covered call income is lumpy/volatile. And, overshadows the dividend payouts themselves. And, of course, being actively managed the actual basket of underlying positions can change, too. Thanks for sharing!!!

[@justinshearer8180]

@@ppcian if you really want to go the covered call route I like GPIX and GPIQ these pay around 8 to 10% in dividend yield and still has good. Appreciation because it writes calls on only about half of the portfolio. This allows for some appreciation. And the expense ratio is .29

[@n1chr0me6]

For an even lower expense ratio, find a similar fund that doesn't write CCs, and buy a 50:50 mix with a fund that writes calls on the full portfolio.

[@citizenoftheyearCC]

Do you like any of the Super High Yield income ETFS like TSLY or ULTY?

[@hulkman4004]

Some people making 50k a month on those covercall etf.

[@HermannTheGreat]

Yet losing 50k in value over a few years and paying taxes on the payouts.

[@hulkman4004]

@HermannTheGreat you made all that money back. You not spending 50k a month to live

[@PassiveMoney1979]

4% isn't that exciting especially with a tranche of the dividend not qualified. I would feel better making 6-7% qualified on established companies like a Verizon\Altria combo

[@ppcian]

Thanks for sharing!

[@etfeasy]

Do not buy DIVO Buy SPYI

[@Baron1975]

Add TLTW and go to sleep 😴

[@WinningCoachdotcom]

Great etf my 2nd biggest holding. It not so new and been around for many years.

[@MartinD9999]

Yeah, 2016 I think. For from new.

[@ppcian]

Thanks for sharing!

[@jacekkawior6693]

Why u need to buy cc etf, when u can spy sp500 etf and selling cc solo? Better returns

[@MartinD9999]

Not everyone wants or knows how to write Calls.

[@leepickell]

@@MartinD9999you’re right, but I wish that he would….definitely leaving money on the table

[@WinningCoachdotcom]

I believe total return out performs schd

[@ppcian]

Thanks for sharing!