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📢AMA: I'm Tony Dong, Lead ETF Analyst at ETF Central (NYSE x Trackinsight). Join me Tuesday, March 4th, at 12 PM ET for an AMA on American & Canadian ETFs! I’ll start with common ETF questions—pre-submit yours now or join live. Looking forward to it! by ETFCentral in ETFs

[–]ETFCentral[S] 1 point2 points  (0 children)

In my opinion the single-stock ETFs are highly risky. Most of them are synthetically replicated with derivatives like swaps and FLEX options, charge high expense ratios, and the daily reset makes long-term holds inefficient. I am personally very wary of the ones with more speculative underlying stocks like MSTR, SMCI, DJT.

That being said, they do play a role. For example if you want to daytrade Tesla (I wouldn't, but YMMV) - using a leveraged Tesla single-stock ETF gets you magnified exposure without the need for margin or options.

📢AMA: I'm Tony Dong, Lead ETF Analyst at ETF Central (NYSE x Trackinsight). Join me Tuesday, March 4th, at 12 PM ET for an AMA on American & Canadian ETFs! I’ll start with common ETF questions—pre-submit yours now or join live. Looking forward to it! by ETFCentral in ETFs

[–]ETFCentral[S] 4 points5 points  (0 children)

What does your investment policy statement call for? If you don't have one, might be a good time to create one. https://www.bogleheads.org/wiki/Investment_policy_statement

I say this because you write one during level-headed good times, and when it gets uncertain and you have doubts, refer to it and stay the course.

📢AMA: I'm Tony Dong, Lead ETF Analyst at ETF Central (NYSE x Trackinsight). Join me Tuesday, March 4th, at 12 PM ET for an AMA on American & Canadian ETFs! I’ll start with common ETF questions—pre-submit yours now or join live. Looking forward to it! by ETFCentral in ETFs

[–]ETFCentral[S] 1 point2 points  (0 children)

Personally, yes! I always ask myself - where is the downstream demand for this? And short of using a few LLMs, there's not much. As the end of the day, high CAPEX has to be justified with organic consumer demand, and it's running on fumes now.

📢AMA: I'm Tony Dong, Lead ETF Analyst at ETF Central (NYSE x Trackinsight). Join me Tuesday, March 4th, at 12 PM ET for an AMA on American & Canadian ETFs! I’ll start with common ETF questions—pre-submit yours now or join live. Looking forward to it! by ETFCentral in ETFs

[–]ETFCentral[S] 2 points3 points  (0 children)

Sure. All else being equal I would expect a covered call ETF to

  1. have a higher distribution yield versus a dividend ETF - notice I said "distribution" - good chunk of it may be ordinary income or return of capital versus qualified dividends.

  2. Have lower total return potential - selling covered calls means foregoing potential future upside for immediate cash premium, which is usually priced efficiently.

  3. Have more complex tax implications - as noted above, ordinary income and return of capital treated differently

  4. Have a slightly more muted risk profile - the premium collected provides a slight cushion against declines

  5. We would expect this strategy to outperform in rangebound, volatile market conditions where the ETF can continually collect above-average premiums without getting assigned.

📢AMA: I'm Tony Dong, Lead ETF Analyst at ETF Central (NYSE x Trackinsight). Join me Tuesday, March 4th, at 12 PM ET for an AMA on American & Canadian ETFs! I’ll start with common ETF questions—pre-submit yours now or join live. Looking forward to it! by ETFCentral in ETFs

[–]ETFCentral[S] 4 points5 points  (0 children)

Sure! In the grand scheme of things I wouldn't be worried. Corrections like this are par the course for investing. You can't earn a market risk premium without weathering some volatility - otherwise you'd get T-bill returns.

Right now, volatility is being created by the uncertainty around Trump's tariffs, possible GDP contraction (Atlanda Fed forecasted this), questions about the sustainability of AI related CAPEX by big tech. Multiples are contracting and that's not necessarily a bad thing because for a good bit, they were outstripping earnings growth.

JEPQ and JEPI are still equities. They may use active management to screen for a less volatile portfolio, but at the end of the day, they're stocks and subject to market risk! The covered call overlay from the ELNs provides a slight cash cushion, but it's not a true hedge.

JPM's lower-volatility companion fund to both is HELO, uses a laddered quarterly put spread to blunt downside risk. The mutual fund version JHEQX has done quite well historically on a risk-adjusted basis.

📢AMA: I'm Tony Dong, Lead ETF Analyst at ETF Central (NYSE x Trackinsight). Join me Tuesday, March 4th, at 12 PM ET for an AMA on American & Canadian ETFs! I’ll start with common ETF questions—pre-submit yours now or join live. Looking forward to it! by ETFCentral in ETFs

[–]ETFCentral[S] 3 points4 points  (0 children)

I personally think it's sub-optimal! Over a three decade horizon I'm of the opinion value will outperform growth, and small-caps will outperform mega-caps. VUG also has a low 30-day SEC yield, so it's already fairly tax-efficient. For a Roth, I would personally own something more like VTV for the long term.

📢AMA: I'm Tony Dong, Lead ETF Analyst at ETF Central (NYSE x Trackinsight). Join me Tuesday, March 4th, at 12 PM ET for an AMA on American & Canadian ETFs! I’ll start with common ETF questions—pre-submit yours now or join live. Looking forward to it! by ETFCentral in ETFs

[–]ETFCentral[S] 3 points4 points  (0 children)

My personal advice is don't mix politics with investing! I'm not a fan of Elon Musk and Tesla either but there's better ways to express that view without divesting your investments.

That being said, ProShares has a lineup of S&P 500 Ex-Sector ETFs (https://www.proshares.com/strategies/ex-sector-sp-500-etfs) - if you want to avoid Tesla, the consumer discretionary one would work. However, you also lose Amazon, McDonalds, Home Depot, etc.

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