A Covered Call’s Tale: When the Dragon’s Hoard Is Trimmed

In the realm of the Guild of Alchemists and Venture Capitalists, where gold coins jingle like dragonflies and spreadsheets hum lullabies, a curious event unfolded. The esteemed Foguth Wealth Management, known for its meticulous hoarding of scrip, had reduced its position in the Global X NASDAQ 100 Covered Call ETF (QYLD +0.45%) by 475,844 shares-a transaction valued at $8.28 million.¹ ¹ A sum that would make even the most frugal of dwarves weep into their ale mugs.

What Happened

According to the sacred scrolls of the SEC, our guild’s ledger now shows a 475,844-share reduction in QYLD during the fourth quarter. The value of this alchemical exchange-$8.28 million-was calculated using the quarterly average price, a method as precise as a blindfolded squirrel tossing acorns into a well.² ² Or, as the Unseen University of Coders might say, “a guess with confidence and a spreadsheet.”

What Else to Know

This transaction nudged QYLD’s share of 13F reportable AUM downward, from 4.69% to 3.41%. A small shift, but in the world of finance, it’s akin to a whisper in a thunderstorm.

Post-filing, the top holdings resemble a medieval feast of assets:

QQQM: $36.74 million (5.7% of AUM) – a hearty stew of growth stocks.
DIVB: $26.95 million (4.2% of AUM) – seasoned with dividend spices.
SPY: $25.25 million (3.9% of AUM) – the ever-popular bread and butter.
XLK: $25.00 million (3.9% of AUM) – a dash of tech wizardry.
SPYV: $21.72 million (3.4% of AUM) – the quiet spice rack.

As of Friday, QYLD’s price stood at $17.68, a 9.54% gain over the past year. Yet, it trails the S&P 500 by 7.27 percentage points. A performance akin to a tortoise racing a hare who forgot to show up.

ETF Overview

Metric	Value
AUM	$8.01 billion
Yield (TTM)	12%
Price (as of market close Friday)	$17.68
1-Year Price Change	9.54%

ETF Snapshot

QYLD’s strategy: Replicate the CBOE NASDAQ-100 BuyWrite Index by holding equities and selling monthly at-the-money call options. A dance between growth and income, like trying to pet a dragon while it breathes fire.
Holdings: The full NASDAQ-100 Index, with a non-diversified portfolio and systematic covered call overlays. Imagine a baker who only bakes one type of bread but sells insurance against it getting stale.
Fund structure: Exchange-traded, passive, and rules-based. Like a knight following a code of honor in a world of chaos.

The Global X NASDAQ 100 Covered Call ETF is a behemoth of the investment world, with $8 billion under management. It offers exposure to the NASDAQ-100 while generating income through covered calls. A fund that seeks to deliver enhanced yield by writing monthly at-the-money call options. For the dividend hunter, it’s a siren song of 12% yields-but what of the cost?

What this transaction means for investors

Covered-call ETFs can seem like the golden goose of finance. Who wouldn’t want 12% yields and monthly distributions? But these goose eggs come with a twist: they’re baked in a cauldron of capped upside.³ ³ Or, as the Discworld’s wizards might say, “You get what you pay for, and then some.”

QYLD’s strategy sells at-the-money call options on the Nasdaq-100, which works best in sideways markets. When equities rise, the income looks good, but the total return lags. Over time, this creates a compounding opportunity cost. It’s like choosing to milk a cow instead of letting it grow into a bull.

The recent trim aligns with a broader shift in the fund’s positioning. Post-sale, holdings skew toward core equity exposure and diversified strategies. It’s as if the guild has traded its dragon-slaying sword for a plowshare. Even with a 9% one-year NAV return, QYLD trails the S&P 500. This reinforces its role as a tactical allocation rather than a core holding. A tool for the toolbox, not the entire castle.

Glossary

Covered call: An options strategy where an investor holds a stock and sells call options to generate income. Like betting the sun won’t rise tomorrow-but only if you’re paid to do so.

At-the-money: An option whose strike price equals the current market price. A fair fight between buyer and seller, like two wizards dueling with equal spells.

BuyWrite Index: An index tracking a strategy of holding stocks and selling call options. A ledger of alchemical transactions.

13F reportable AUM: Assets under management reported to the SEC. The tax returns of the investment world.

Dividend yield: Annual dividend divided by current price. A measure of how much the goose lays versus its weight.

Alpha: Performance relative to a benchmark. The difference between a hero and a has-been.

Trailing twelve-month (TTM): The 12-month period ending with the latest report. A rearview mirror of financial history.

Exchange-traded fund (ETF): An investment fund traded on exchanges. A magic box of assets.

Non-diversified portfolio: A portfolio concentrated in fewer securities. A bet on a single horse in a race with many.

Systematic covered call overlays: A rules-based approach to selling call options. A recipe for income, but with a side of risk.

Passive, rules-based approach: A strategy following a set methodology. Like following a map written by a blindfolded cartographer.

Option premium: Income from selling an option. The price paid to the future for present comfort.

And so, dear reader, the tale of QYLD continues. A fund that promises 12% yields but demands a price in flexibility. For the dividend hunter, it’s a reminder: never chase the goose-watch the farmer. 🐔

2026-01-06 00:42