The only pure holding I have in Technology right now is DCBO (for growth) with <1% holding and I'm thinking of selling that and dumping into either of the above.
I'm really intrigued with QMAX yield of ~ 12% and MER of .65% compared to ZWT with a yield of ~3.57% and higher MER of .71%.
I understand that both could be very volatile (ZWT -30.9% in 2022 and up 64.5% in 2023). QMAX isn't a year old yet so no stats but I assume will be comparable?
Anyway, looking for your thoughts on which is better, is QMAX yield of 11.9% (too good to be true)? With QMAX, AUM of $374,505,060 some people like it? Thanks Bill
The main difference is QMAX uses an 'in the money' call option strategy and ZWT uses an 'out of the money' strategy. Thus, QMAX gets more option premium and thus can offer a higher yield. But in a sector rally, its positions can get called away, and it has to re-enter its trades. ZWT is more likely to profit somewhat more in a rally. Note this year, ZWT is up 36.5% and QMAX 24.3%. Some of both ETF's distributions will be considered return of capital. Tax breakdown will vary by year. This is not necessarily bad and can be helpful for taxes. For tech exposure with income, we would be comfortable with either. It's a trade off between income and growth, essentially. There is a downside: in a sector crash, the option income will only offset some of the decline. These funds can still decline, perhaps significantly, and investors need to be prepared for that possibility and not get too seduced by the income.