During a bull market, standard ETFs like SPY and QQQ typically outperform their covered call variants (SPYI and QQQI) by 2-5% in the short term, as covered call strategies sacrifice some capital appreciation for consistent income generation; however, both strategies benefit from broad market exposure and can be part of a diversified portfolio combining growth and income objectives.
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Deep Dive
New Market Highs Again… QQQ vs QQQI in the Current Market RunAdded:
Folks, what is going on today? Today, the S&P 500 made a new all-time high, the Nasdaq made an all-time high, the Dow Jones is looking great, and we're trying to wonder what the heck is going on here. How does the market continue to make new high after new high? Well, let's dive into it just a bit. Well, so far, 83% of the S&P 500 companies have reported earnings into Q1, and we have seen phenomenal beats across the board.
We've seen Disney up, we've seen Uber, we've seen AMD up today 20%.
We've seen Super Micro Computer, I think up 15%.
We are seeing performance and growth across multiple sectors of the market showing us that not one specific stock is necessarily carrying the growth. And that that's a testament to diversifying and buying something like the S&P 500 or VTI, where you could just kind of VTI and chill or S&P 500 and chill and enjoy that that those gains across the broad market. So, if you've been DCA'ing into the VOO's of the world, the SPY's of the world, the QQQ's of the world, the QQQ's of the world, we are seeing the fruits of that blind investing and just kind of just consistent uh you know, reinvesting into these products. And today, what I wanted to do is compare how VOO or SPY and QQQ are doing against SPYI and QQQI to see is SPYI and QQQI are they holding up in comparison to their underlying during this big bull run, guys? Let's check it out. All right, guys. We are here at Drip data. We're on the total return comparison or ETF comparison page. And you know, you can get access to Drip data by going to the description below, and you'll get access to Drip data.
There is a free version, and there is a paid pro version. You can go to the description and go to the link and So, we're over here at the total return comparison. So, we're going to throw up here SPY.
We're going to throw up here QQQI.
Actually, SPYI will do to keep them lined up. And then we'll also do QQQ, which is the NASDAQ 100. And then we're going to do QQQI. And let us see how these products have held up as compared to their underlying this year.
All right, boom. Once you do that, everything spits out nice and beautifully. All right, and we're going to sort here by total return, guys.
Total return. And let us do um let us do the 1-month total return um of again comparing SPY versus SPYI and QQQ versus QQQI.
And what do we see here?
We see SPY at 10%, which is phenomenal, guys. What we're seeing from SPY, you know, and it just in March, just like a month ago, right? Let's let's pull this back out a little bit. Just look at these lows in March, guys. Look at the lows for the year in March, okay? And we just rolled right back up and just ripped, guys. We just ripped right back up. This is a testament to blindly investing in the market and not letting fear take over, right? You just don't know what will happen, guys. You don't know what will happen, but if you were investing in all assets pretty much with some, you know, concentration in tech, if you're a bull in and in tech, if you believe in it, but buying into a VTI, which is the total US stock market, or the S&P 500, which covers almost all of the market cap in the US, you know, you can't go wrong, right? At least historically speaking, you you really won if you did sell and you kept consistently investing. All right? And the benefit of SPI, QQQI, guess what? It does hold S&P 100. It does hold the Nasdaq 100. Yes, it writes options on that on these uh you know, on top of the assets, but still you're getting the exposure to the broad market.
Okay. So, let's look at the 1-month layer here, okay? And we can see that over the past month, all right, starting April 5th to May 5th or May 6th, SPI 10%, SPI I 6.6%, okay? QQQ 15 uh 0.82% and um and QQQI 10.13%, guys, okay? So, you know, you're going to see, okay, QQQ one in this case.
Um and they have a lead um versus uh you know, the the weakest one here, SPI I, by 9%. But, all right. So, look let's look back here, okay? So, really it's a difference of you know, 2% ish, 3% but 3% between the two, SPI I and SPI, and QQQ 15 versus 10. QQQ versus QQQI, yeah, we let up a little bit there. We They let There was a little bit of let up versus QQQ, but you know, this is kind of what happens during a a a vi- a violent bull run. You will see um you will see the you know, the underlying rip much higher, okay? It'll even itself out. It should, you know, over a longer period of time, but on those small rips, you know, you can see a violent upswing against the underlying and some capping against the covered call. But, I'm still very, very happy owning a QQQI doing Let's move year-to-date.
Doing 7% 7.2% year to date paying consistent income as compared to holding the underlying at 11%. Yeah, I'm we're giving up a little cuz some gains, right? But, you know, don't invest in it don't not financial advice whatsoever, but I invest in both. I'm in both QQ QI and QQQ for the mixed bag of growth plus income, guys. All right?
And you can see a small variance between SPY I and uh and SPY, right? Like uh 2% variance, not too shabby, right? Not too shabby. So, look at that at these comparisons.
Really interesting stuff. And in this tool, what else can you do? You can kind of see that the breakout per uh per ticker. You can see which one has the return lead. So, again, QQQ would beat SPY I by about 7% in a 3-month period. Has a CAGR lead to an assumed CAGR. The story for today is looking at today's market update. And just, you know, appreciating the growth that we're seeing, appreciating the gains, appreciating the V-shape recovery that we saw.
Let me move this to a year to date.
Appreciating the V-shape recovery we saw from uh you know, the March lows into May. So, what a what a what a market, what a fun ride, guys. Let me know if you're invested in SPY I, QQQ I. And if you'd like, go sub and subscribe to uh Drip data, subscribe to the channel. All the best and cheers.
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