Nasdaq Covered-Call ETF With 17% Payout Beats QQQ Over One Year
TDAQ pays a 17.55% distribution rate by selling same-day Nasdaq index calls while holding QQQM for Nasdaq-100 exposure. For the year through Sept. 21, 2026, it returned 30.57% versus 29.65% for QQQ, even with a 0.83% expense ratio. Its daily options reset keeps overnight Nasdaq exposure and avoids locking in a single upside cap for weeks, though one year of outperformance may not persist through a full market cycle.
TDAQ, the TappAlpha Innovation 100 Growth & Daily Income ETF, pairs a Nasdaq-100 holding through QQQM with an income overlay. It sells Nasdaq index calls that expire the same day, resetting the cap each session. Its distribution rate is about 17.55%, and its expense ratio is 0.83%.
For the year ended Sept. 21, 2026, TDAQ gained 30.57%, slightly above QQQ's 29.65%. Because the calls expire daily, the fund keeps overnight Nasdaq exposure and does not lock one upside limit for weeks. Still, it forgoes some intraday gains, and one year's result may not repeat across a full cycle.
Products like TDAQ may appeal to income-seeking investors, including retirees, by offering high payouts alongside Nasdaq exposure. But distributions are not free money; if option premiums and gains fail to cover payouts, share values could erode. Advisers and individual investors may need to weigh total return, risk, and suitability rather than yield alone.