Sold QQQI (5.3%)

First SPYI went, and now QQQI? 

These 2 NEOS funds have delivered on their promise, so it wasn’t dissatisfaction with them, but rather superior performance from a competitor. Goldman’s funds have simply outperformed (more detail below, under “GPIQ”).

What about other NEOS funds?

I still like and hold NIHI, IYRI, MLPI, and BTCI from NEOS. They’re one of my favorite fund managers, but my decisions are based on the performance of individual funds.

Things I still like about QQQI: 1/ The consistently high percentage of Return of Capital. For most investors this is a substantial tax advantage. 2/ The consistent distributions. 3/ The high yield. Some investors prefer to get more cash today, so that they can spend or reinvest it at their discretion. 

Also, there may be tax consequences for switching funds, so each investor should take those into consideration.

Bought GPIQ (5.3%)

Why has GPIQ outperformed? 

I don’t know for certain, but my assumption is that GPIQ sold calls on a smaller percentage of the portfolio when the market was recovering. The differences between the 2 funds were discussed in this GPIQ vs QQQI comparison.

But QQQI’s yield is almost 40% higher!

Currently, QQQI’s is yielding 14.5% versus GPIQ at 10.2%. Over the short term, the higher yield is tempting. Assuming the income is sufficient for your needs (I’m looking for a minimum of 8%), a higher total return is preferable over the long term.

GPIQ’s price (and therefore NAV) has grown faster than its QQQI competitor. That’s partly because it distributes less, and partly because it is outperforming on a total return basis. As GPIQ’s value grows (faster), it will generate its option income off a larger asset base. If this trend continues, I expect this to result in GPIQ offering substantially more income growth than QQQI.