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
55.06 55.37 55.13 -0.07 2.6M - 2.3B

XLG Dividend-Like Income Using Covered Calls

With XLG at 55.13, 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% 1.65 0.5
5% 2.76 0.8
10% 5.51 1.5

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
Sep 19 56.00 0.20 36 0.6 0.63 (1.1%)
Dec 19 56.00 1.40 127 1.1 0.63 (1.1%)
5% Yield On XLG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 19 56.00 1.40 127 1.1 0.63 (1.1%)
Jan 16 56.00 1.80 155 1.2 0.63 (1.1%)

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Want more examples? XLF Dividend | XLI Dividend