XLG Dividend Type Payments

Invesco S&P 500 Top 50 ETF dividend

Although XLG has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Invesco S&P 500 Top 50 ETF to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):

Invesco S&P 500 Top 50 ETF (XLG)
Bid Ask Last Change Volume P/E Market Cap
50.02 50.25 50.12 -0.58 2.7M - 2.2B

XLG Dividend-Like Income Using Covered Calls

With XLG at 50.12, here's a table showing how big the annual "dividend" (i.e. total annual call premium received) would need to be to attain 3%, 5%, and 10% annual yields. Also shown is the equivalent number of cents/day necessary to achieve each yield:

Annual Yield Annual Premium Cents/Day
3% 1.50 0.4
5% 2.51 0.7
10% 5.01 1.4

So now we need to find out of the money covered calls that pay at least the prescribed cents/day amount of time premium. That will generate income and, because they are out of the money, leave room for some upside potential on the stock. Here are some examples:

3% Yield On XLG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 18 50.00 0.90 36 1.8 0.00 (0.0%)
Sep 19 50.00 1.90 99 1.7 0.00 (0.0%)
5% Yield On XLG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 18 50.00 0.90 36 1.8 0.00 (0.0%)
Sep 19 50.00 1.90 99 1.7 0.00 (0.0%)
10% Yield On XLG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 18 50.00 0.90 36 1.8 0.00 (0.0%)
Sep 19 50.00 1.90 99 1.7 0.00 (0.0%)

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