Nikkei 225 - Covered Call ETF

[TokyoBoglehead]

https://money-bu-jpx.com/news/article038820/

This sort of product looks mighty tempting to generate yield, with a low yen and a bear market.

I will probably abstain though...

Thoughts?

[aussieinjapan]

I've had QYLD (also from Global X) in my portfolio for a while and really appreciate the monthly stream of USD I can reinvest (in US stocks or in more QYLD) now the USD is strong. I've always wanted something like this for JPY so I can reinvest, or even just use to offset monthly expenses. I know there are arguments against dividends if your plan is to invest for retirement, but I do have funds I'd like to do something with, but already have as much as I'm comfortable with in growth stocks/index funds. There's risks associated with these ETFs of course, but they supposedly do well in flat or bear markets. https://www.globalxetfs.com/content/fil ... raphic.pdf

Looks like it will start trading July 29th. Just a few more days!

[TokyoBoglehead]

My research into Covered call ETFs all pointed to strongly avoiding them.

For any long-term investor or anyone in the accumulation phrase, they cap your potential upside and guarantee lower returns.

There is no real upside with them as far as I can tell, and there are better ways at generating income "In" retirement.

[aussieinjapan]

It's now on Rakuten Securities as "ＧＸ日経カバコ (2858) " and will start trading today. You may be right about カバコETFs being not so useful for long term accumulation. They seem to be very popular with the FIRE crowd on YouTube (you'll find tens of videos on QYLD for example). If regular income is what you're after (and for most people here, I guess the answer is no) I guess that's who they are targeted at. I'm not making カバコETFs my main strategy of course, but holding a little mainly as an experiment.