I bought OVQ 0.00%↑ this morning for a few reasons. As everyone who subscribes to me knows, I had one income ETF this whole time GPIQ 0.00%↑. I chose GPIQ 0.00%↑ because of the 25%/75% option overlay which does not cap the upside of the Nasdaq completely.
Looking at total returns, GPIQ 0.00%↑ performs admirably compared to the underlying Nasdaq and much better than other covered call ETFs.
However, there was one ETF I looked at that performed BETTER than the underlying and that was OVL 0.00%↑. OVL 0.00%↑ uses put credit spreads on the SPX to increase the return on the underlying S&P500 index without capping the upside at all. The total return says it all:
This past Friday, Liquid Strategies launched OVQ 0.00%↑. The only difference between OVL 0.00%↑ and OVQ 0.00%↑ is that OVQ 0.00%↑ uses the Nasdaq as the underlying same as GPIQ 0.00%↑. As a value and growth long term investor, I tend to favor high growth tech in my mix as much as possible.
This essentially is the best of both worlds - uncapped upside on Nasdaq AND put credit spread premium using the more stable SPX! So now I have a strategy that works in slightly down markets, flat markets and raging bull markets. My goal is to have a 60-40 ratio of capital allocation between OVQ 0.00%↑ and GPIQ 0.00%↑ so I will have some catching up to do for OVQ 0.00%↑.
This does not change my individual equity strategy at all. The more money I put into the portfolio, the greater portfolio margin buying power for selling more puts and increasing holdings. I continue to look forward to high growth/compounding from my individual stock mainstays and I’m still actively looking for opportunities in individual stocks.
As always, my content is not financial advice so please do your own due diligence before investing any of your own money.