Investing in the Nasdaq 100 index has delivered some great returns for investors this year as tech stocks have been doing exceptionally well due to the excitement around artificial intelligence. The Invesco QQQ Trust (NASDAQ:QQQ), which tracks the index, has generated returns of more than 17% — better than the S&P 500’s returns of less than 15%, and well above the Nasdaq’s gains of only 3%.
But there’s a new exchange-traded fund (ETF) which looks to be more aggressive, targeting a 20% annual yield, with the help of options. Defiance has launched the Nasdaq 100 Income Target ETF (NASDAQ:QQQT). The fund is going to hold shares of ETFs which track the Nasdaq 100 and it’s also going also sell daily credit call spreads. It says, “this innovative approach is designed to maximize income potential while retaining upside growth opportunities for investors.”
The fund just launched last week and it charges an expense ratio of 1.05%, which is high for ETFs but given the aggressive strategy involving options, it’s not surprising to see there be a bit of a premium for this type of investment. Currently, its only holding is the QQQ fund along with options.
The new ETF says its aim is to make distributions on a monthly basis. It’s a bold strategy for investors who want the dividend income and who are bullish on the Nasdaq 100. If you want a strategy which involves high dividends plus a high rate of growth, this could be a fund worth considering for your portfolio.
