The analysis indicates that of the NEOS Nasdaq-100 High-Yield ETF (QQQI)’s 14% yield, approximately 98% consists of capital returns rather than income, and it has underperformed the QQQ year-to-date.
Yahoo Finance analysis points out that of the approximately 14% yield advertised by the NEOS Nasdaq-100 High-Yield ETF (QQQI), about 98% of the distributions are classified as “return of capital” rather than income in the economic sense.This means that investors are recovering their own principal, which reduces their cost basis and defers taxes until the time of sale.The analysis also noted that as of July 28 of this year, QQQI had risen 4.94% year-to-date, while the Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100 Index, had risen 9.96% over the same period, with QQQI underperforming by 5 percentage points.
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Disclaimer: This content reflects the author's personal views only and does not constitute investment advice.
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