QYLD Covered-Call Income Calculator

What the QYLD calculator is projecting

QYLD — the Global X NASDAQ 100 Covered Call ETF — is the oldest and one of the largest Nasdaq-100 covered-call funds (launched 2013, roughly $8.2B in assets), and it is the textbook example of how a very high headline yield can be mostly your own capital coming back. It holds the Nasdaq-100 and, following the Cboe Nasdaq-100 BuyWrite index, writes call options on close to 100% of the portfolio at the money every month. Those premiums fund a distribution near 11.8% (asOf 2026-06) paid monthly. The tell is the gap between that number and the fund's ~0.11% SEC yield: the difference is not earned income, it is premium and return-of-capital. This calculator starts from the distribution rate and the 0.60% expense ratio, then compounds your balance and contributions forward, reporting annual income, portfolio value, and yield-on-cost as a low / base / high scenario band.

The full at-the-money overwrite is what sets QYLD apart from a JEPI or JEPQ, which sell partial, further-out-of-the-money calls through equity-linked notes and keep some upside. Because QYLD writes at the money on the whole book, it caps essentially all of the Nasdaq-100's appreciation in a rising market while still absorbing the drawdowns — so the model anchors its price growth at 0%. Just as important, QYLD's per-share distribution has trended down, not up: the monthly payout fell from roughly $0.18–0.23 in 2021 toward the $0.17 range by 2026, so the preset uses a mildly negative distribution growth (−2%/yr) rather than the flat 0% used for its peers. These are editorial preset assumptions, not predictions — but they are calibrated to what this fund has actually done.

Who a QYLD projection tends to fit — and who it does not

QYLD is built for one job: maximizing current monthly cash flow from a growth index without selling shares, accepting a flat-to-eroding share price in exchange. That can suit an income-first holder — someone drawing a paycheck-like stream today who does not need the balance to grow. It is a poor fit if your goal is total return or decades of compounding: the capped upside plus return-of-capital means the NAV tends to grind sideways or lower, and reinvesting a distribution that is partly your own principal compounds income faster than it compounds real wealth. Toggle the Value headline to watch how the 0% price-growth anchor shapes the terminal balance versus the income view, and turn DRIP off to see how much of the projected value depends on reinvestment rather than the fund appreciating.

Return-of-capital, NAV erosion, and the tax nuance

QYLD's distribution has historically been about 95% return-of-capital (ROC). ROC is not tax-free income — it lowers your cost basis, deferring tax until you sell (or until basis hits zero, after which further ROC is taxed as capital gains). The remaining slice comes from index-option gains that split 60/40 under §1256, which is relatively tax-friendly. So in a taxable account QYLD can look tax-efficient in the near term — but the same ROC that defers tax is the mechanism eroding NAV, which is why the warning badge and the NAV-erosion callout above subtract that erosion from price growth in the projection. The Account toggle models the difference: a taxable account applies the mixed-ROC / §1256 treatment before the DRIP reinvests, while a Traditional IRA or Roth compounds untaxed. Final classification is reconciled by the fund after year-end on Form 1099-DIV; these are educational estimates, not investment advice.