During my time as a fighter pilot, a one-versus-one dogfight was one of the most challenging types of flights. This type of mission pitted one pilot’s skills against his opponent. This air combat training was not the type of flight in which you wanted to come home second best.
The new category of single stock covered-call ETFs now has two sponsors offering competing funds covering the same underlying stocks. This type of ETF is new in the market, with the oldest funds operating for just over a year. Many have track records that are only a few months in length.
The funds have been trading long enough to compare returns for covered-call ETFs with the same underlying stock.
This week I want to compare the two Alphabet Inc. (GOOGL) covered-call ETF returns since November 1, 2023.
The YieldMax ETFs were the first mover with this type of ETF, launching their first funds in November 2022. Currently, YieldMax offers 19 single-stock ETFs, with more on the way. These funds have caught the attention of investors with eye-popping distribution yields.
The six Kurv single-stock covered-call ETFs launched at the end of October 2023. These funds have lower distribution yields, but the stock price charts for the last four-plus months have very positive slopes.
With at least a few months of track records, I want to compare the returns of the YieldMax and Kurv funds covering the same stocks.
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 21.53%. Since November 1, the GOOY share price has declined by 7.76%. GOOGL gained 24.4% over the same period. GOOY paid $1.98 in dividends to add 10.61% to the starting share price. A little math gives a total return of 2.85% since November 1. GOOGL shares significantly outperformed the YieldMax GOOGL covered-call ETF.
The Kurv Yield Premium Strategy Google (GOOGL) ETF (GOOP) shows a current distribution rate of 12.20%. That’s almost 43% less than the current yield quote for GOOY. From November 1 through April 16, the GOOP share price gained 13.02%. Over that period, GOOP paid $1.38 in dividends. The dividends earned add 5.53% to the initial share value, giving a total return of 18.55%.
My two previous reports on the Amazon and Apple covered-call ETFs showed total returns that were very close, with the YieldMax funds getting the win both times. For Google, the Kurv covered-call fund performed significantly better, catching a large portion of gains in GOOGL.
I will do the same calculations for the other four Kurv funds against their YieldMax counterparts over the next couple of months and publish my findings here.
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