Today I continue what I have been calling my dogfight series, pitting two single-stock covered call ETFs, using the same underlying stock, against each other.
YieldMax invented the single-stock covered call ETF in 2023. It now has 25 of these ETFs covering different popular stocks. And in October 2023, Kurv funds launched six single-stock covered call ETFs.
Selling calls for income gives investors a lot of ways to generate income and total returns. The two ETF sponsors have taken different approaches, with YieldMax going for big, big yields and Kurv managing their funds for lower yields, but more upside participation in the share price.
The Kurv funds have traded for almost a year, which gives me a track record to use to compare how well the competing funds are performing.
This week I want to compare the two Alphabet, Inc. (GOOGL) covered call ETF returns since November 1, 2023.
The current quoted yield for the YieldMax GOOGL Option Income Strategy ETF (GOOY) is 28.39%. Since November 1, 2023, the GOOY share price has declined by 19.5%. With the covered call strategy dividends, the GOOY total return jumps to a positive, but not great, 5.4%. GOOGL has performed well over the last year, up 29%. The YieldMax strategy for GOOGL has not served investors well.
The Kurv Yield Premium Strategy Google (GOOGL) ETF (GOOP) shows a current distribution rate of 15.85%. That’s about half the current yield quote for GOOY. From November 1 through September 24, GOOP’s share price gained 10.8%. Over the period, including the dividends, GOOP put up a total return of 23.15% and produced a positive share price and a total return that gave investors a significant portion of the substantial gains posted by GOOGL.
The differences between the GOOY and GOOP returns are shocking. In previous weeks, I made the same comparison for the AMZN and APPL covered call ETFs, and the results from YieldMax and Kurv were very close.
This is the third comparison out of the six Kurv covered call ETFs. Check back next week for the next installment.
I will also track comparisons over the longer term—comparisons I’ll share exclusively with subscribers of my ETF Income Edge service.
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