STRATEGY High Income
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IQQQ: Target Both High Income and Nasdaq-100 Returns
May 14, 2024

Watch ProShares’ Simeon Hyman discussing the $78 billion covered call landscape1 and ProShares Nasdaq-100 High Income ETF (IQQQ) with Nasdaq.

  • Traditional covered call strategies use monthly call options and typically require investors to sacrifice the potential for long-term Nasdaq-100 returns in order to earn high income.
  • In 2023, monthly covered call strategies tracking the Nasdaq-100 index delivered less than half of the Nasdaq-100’s total return.2

IQQQ is the first Nasdaq-listed ETF using an innovative daily call options strategy. IQQQ targets both the high income investors want, and the Nasdaq upside returns that traditional covered call strategies may sacrifice.

IQQQ gains exposure to the sale of daily call options using swap agreements and does not trade options.

 

 

1 Source: Morningstar. As of February 27, 2024

2 Source: Bloomberg, Cboe Nasdaq-100 BuyWrite V2 Index.

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ISPY

S&P 500 High Income ETF

ProShares S&P 500 High Income ETF seeks investment results, before fees and expenses, that track the performance of the S&P 500 Daily Covered Call Index.

IQQQ

Nasdaq-100 High Income ETF

ProShares Nasdaq-100 High Income ETF seeks investment results, before fees and expenses, that track the performance of the Nasdaq-100 Daily Covered Call Index.

IQQQ seeks to replicate a daily covered call strategy by investing in equity securities and derivatives. The fund does not sell (write) call options.

This is not intended to be investment advice.

Investing involves risk, including the possible loss of principal. This ProShares ETF is non-diversified and entails certain risks, including risks associated with the use of derivatives (swap agreements, futures contracts and similar instruments), imperfect benchmark correlation, leverage and market price variance, all of which can increase volatility and decrease performance. Please see summary and full prospectuses for a more complete description of risks on ProShares.com.

There is no guarantee any ProShares ETF will achieve its investment objective. The performance of the fund may not correspond to the performance of the Nasdaq-100 Index, the fund may not be successful in generating income for investors, and the fund may not capture returns that traditional covered call strategies may sacrifice.

The Nasdaq-100® Daily Covered Call Index replicates the performance of a covered call investment strategy that combines a long position in the Nasdaq-100 Index with a short position in Nasdaq-100 Index® call options. In particular, the index is designed to replicate a daily covered call strategy that sells call options with one day to expiration each day. The fund intends to make distributions each month of an amount that reflects the dividends and call premium income earned by a daily Nasdaq-100 Index covered call strategy (net of expenses). There can be no guarantee that the fund will make such distributions, and the amount of such distributions, if any, may vary significantly from month to month. A significant portion of such distributions may be characterized as a return of capital. Shares of any ETF are generally bought and sold at market price (not NAV) and are not individually redeemed from the fund. Your brokerage commissions will reduce returns.

Carefully consider the investment objectives, risks, charges and expenses of ProShares before investing. This and other information can be found in their summary and full prospectuses at Proshares.com.

Nasdaq®, Nasdaq-100 Index®, Nasdaq-100®, NDX®, Nasdaq-100 Daily Covered Call™ Index, NDXDCC™, Nasdaq-100 Daily Covered Call Option™ Index, NDXDCCOV™, Nasdaq-100 Daily Covered Call Income™ Index, NDXDCCI™, are registered trademarks of Nasdaq, Inc. (which with its affiliates and third party licensors is referred to as the “Corporations”) and are licensed for use by ProShare Advisors LLC. The Product(s) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).

ProShares are distributed by SEI Investments Distribution Co., which is not affiliated with the funds’ advisor or sponsor.

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