XYLD: A No-Brainer Alternative To The SPX

Stuart Allsopp profile picture
Stuart Allsopp


  • The XYLD is a solid option for U.S.-focused investors looking for high income and willing to forego some upside in the event of a resumption in the SPX bull market.
  • The XYLD now yields almost 10% versus the S&P 500's paltry 1.4%, making it highly likely to outperform over the coming years.
  • The ETF is likely to perform very well in a sideways market, while the strategy it employs has a track record of strong outperformance during bear markets.

Risk reward ratio / risk management concept : Risk and reward bags on a basic balance scale in equal position, depicts investors use a risk reward ratio to compare the expected return of an investment

William_Potter/iStock via Getty Images

The Global X S&P 500 Covered Call ETF (NYSEARCA:XYLD) tracks the performance of the CBOE S&P 500 BuyWrite Index, which holds the S&P 500 and writes calls against it in order to earn the option


XYLD Vs. SPX. Total Return Performance (Bloomberg)


CBOE S&P 500 BuyWrite Index Vs. SPX. Total Return Performance (Bloomberg)

This article was written by

Stuart Allsopp profile picture
I am a full-time investor and owner of Icon Economics - a macro research company focussed on providing contrarian investment ideas across FX, Equities, and Fixed Income based on Austrian economic theory. Formerly Head of Financial Markets at Fitch Solutions, I have 15 years of experience investing and analysing Asian and Global markets.

Disclosure: I/we have a beneficial short position in the shares of SPX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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