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
49.43 49.95 49.77 +0.41 450K - 2.1B

XLG Dividend-Like Income Using Covered Calls

With XLG at 49.77, 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% 1.49 0.4
5% 2.49 0.7
10% 4.98 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
Dec 20 50.00 0.40 22 1.8 0.05 (0.1%)
Jan 17 51.00 0.30 50 0.6 1.05 (2.1%)
5% Yield On XLG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 20 50.00 0.40 22 1.8 0.05 (0.1%)
10% Yield On XLG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 20 50.00 0.40 22 1.8 0.05 (0.1%)

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