A Hedged ETF With Big Income and Upside Potential

Core Insights - The Nasdaq-100 Index (NDX) has historically provided strong long-term gains primarily due to its large-cap technology stock exposure, but it is not known for income generation [1] - The NEOS Nasdaq-100 Hedged Equity Income ETF (QQQH) offers a significant distribution rate of 9%, which is a substantial improvement over NDX's 0.45% yield, while also providing downside protection [2] Performance and Protection - QQQH has a track record of lower volatility, with an average annualized volatility of 13.4% over the past three years, compared to 20.1% for the largest NDX-tracking ETF, and its largest drawdown was 760 basis points lower than that of NDX [3] - Despite its hedging properties, QQQH has still managed to return nearly 87% over the past three years, indicating that it does not completely sacrifice upside potential [4] Market Relevance - With the ongoing momentum in the artificial intelligence (AI) sector, QQQH could attract a wide range of investors, especially if there are fluctuations in AI adoption and productivity gains across sectors [5][6]