🤝 BFF Take
XYLD Has Better Risk-Adjusted Returns — QYLD Sacrifices Too Much Upside
QYLD (Global X Nasdaq 100 Covered Call ETF) and XYLD (Global X S&P 500 Covered Call ETF) both generate income by holding their respective index and systematically selling call options against it — capturing the option premium as monthly income. QYLD writes calls on the Nasdaq-100 and yields around 11-13%; XYLD writes calls on the S&P 500 and yields around 9-11%. Both charge 0.60%. The fundamental tradeoff: by selling calls, both funds cap their upside. When markets rally, they don't participate fully — the option buyer captures those gains. Over the past decade, QYLD has significantly underperformed a simple QQQ on total return basis because it gave away Nasdaq's explosive upside. XYLD's S&P 500 base has similar but less extreme dynamics. Neither is appropriate as a core holding; they serve income-first investors who need monthly cash flow and can accept capped appreciation.
📋 Quick Takeaways
💵QYLD yields ~11-13% monthly income; XYLD yields ~9-11% — high income, but you cap your upside to get it
📉In bull markets, QYLD/XYLD significantly underperform their underlying indexes — the covered call cap limits gains
⚖️Both cost 0.60%; XYLD's S&P 500 base is less volatile than QYLD's Nasdaq-100 — better risk-adjusted tradeoff
📊 Data-Based Take: XYLD has the lower fee
Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.
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Reviewed by a CFA® Charterholder · Data updated Jun 2026 · Educational only, not financial advice
QYLD
Global X Nasdaq 100 Covered Call ETF
XYLD
Global X S&P 500 Covered Call ETF
📋 QYLD vs XYLD — Key Facts Side by Side
| Metric |
QYLD |
XYLD |
| Fund Name |
Global X Nasdaq 100 Covered Call ETF |
Global X S&P 500 Covered Call ETF |
| Issuer |
Global X |
Global X |
| Tracks Index |
Nasdaq-100 (Covered Call) |
S&P 500 (Covered Call) |
| Expense Ratio |
0.60% |
0.60% |
| Cost per $10K/yr |
$60.00 |
$60.00 |
| AUM |
$8B |
$3B |
| Holdings |
101 |
503 |
| Inception |
2013 |
2013 |
| 1-Year Return |
+6.20% |
+8.40% |
| 3-Year Return |
+1.40% |
+4.80% |
| 5-Year Return |
+7.80% |
+8.90% |
| Avg Bid-Ask Spread |
0.01% |
0.02% |
Data from ETF BFF database. Returns are annualised. Not investment advice.
📊 QYLD vs XYLD — Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Should You Buy QYLD or XYLD?
Choose if...
QYLD
- You already use Global X and prefer staying within their fund family
Choose if...
XYLD
- You want broader diversification (503 holdings vs 101)
- You want focused large-cap US stock exposure via S&P 500 (Covered Call)
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❓ QYLD vs XYLD — Frequently Asked Questions
How do QYLD and XYLD generate their high yields?
Both ETFs generate income by selling (writing) call options on their respective index. QYLD holds the Nasdaq-100 stocks and sells monthly at-the-money call options; XYLD holds S&P 500 stocks and does the same. The option buyer pays a premium (income) for the right to buy the index at today's price. If the market rises above that price, the ETF doesn't participate in those gains — they go to the option buyer. The premiums collected are distributed as monthly income.
What is the downside of QYLD and XYLD?
The primary downside is sacrificed upside participation. When the Nasdaq-100 rises 30% in a year (as it often has), QYLD captures only the option premium — perhaps 12% income — while a regular QQQ holder gets the full 30%. Over a decade of a bull market, this compounding loss of upside has made QYLD a poor total return vehicle compared to QQQ. Both funds also still fall with their underlying indexes in bear markets — you don't lose less on the downside.
Is QYLD or XYLD suitable for retirement income?
For investors who truly need current income and are willing to accept limited appreciation, QYLD or XYLD can serve a specific purpose. The monthly distributions are predictable. However, the funds don't grow with inflation over time the way dividend growth ETFs do. A retiree relying on QYLD/XYLD for income may find their purchasing power eroding. These ETFs work best for investors who also have growth-oriented holdings elsewhere.
Does QYLD or XYLD protect against market crashes?
Not significantly. In a market decline, both funds fall with their underlying indexes. The only cushion is the option premium already collected that month — a small offset against a potentially large decline. During 2022, both QYLD and XYLD fell substantially along with their indexes. The covered call strategy reduces but does not eliminate downside risk.
Are QYLD and XYLD distributions qualified dividends?
No — option income is generally taxed as ordinary income, not qualified dividends. This makes QYLD and XYLD particularly tax-inefficient in taxable accounts. Their distributions receive the same tax treatment as interest income. If you want to hold QYLD or XYLD, a tax-advantaged account (IRA) is strongly preferred to avoid the ordinary income tax drag each month.
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📄 QYLD & XYLD Fact Sheets
ℹ️ Data shown is for educational purposes and may not reflect the most current figures. Returns are trailing price-based and exclude dividend reinvestment. Past performance does not guarantee future results. ETF BFF is not a licensed financial advisor — this is not personalized financial advice.