Nuveen NASDAQ 100 Dynamic Overwrite Fund (NASDAQ:QQQX) is a fund that has gained popularity in recent years. Many investors have been drawn to this fund due to its unique strategy. To be clear at the very start, the Nuveen NASDAQ 100 Dynamic Overwrite Fund (NASDAQ:QQQX) is not just one of those funds such as the ProShares UltraPro QQQ (AMEX:QID) or the ProShares UltraPro Short QQQ (AMEX:PSQ). These are leveraged ETFs that allow investors to either bet on or against the NASDAQ-100 index. While a fund such as QQQX does allow investors to gain exposure to the NASDAQ-100, it does so in a far different way.
Both PSQ and QID allow you to short the NASDAQ-100 or obtain leverage, but the Nuveen NASDAQ 100 Dynamic Overwrite (NASDAQ:QQQX) makes use of a dynamic option strategy to gain exposure to the index. An option strategy is a way to increase exposure to an asset without investing in it directly. In the case of QQQX, the fund uses a strategy of writing call options and buying protective puts to gain exposure to the NASDAQ-100. This strategy allows it to generate income from the option premiums while also protecting against large losses.
The Nuveen Nasdaq 100 Dynamic Overwrite Fund (NASDAQ:QQQX) is one of the most popular funds of its type. It has outperformed the NASDAQ-100 index since its inception in 2018. During that time, the fund has returned an average of 7.5% per year, which is higher than the index's 5.5% average return. We will also note here that QQQX holds far more stocks than the index, which gives it a much broader exposure.