QYLG offers high yield with positive NAV growth due to 50% options coverage capturing upside.

But the first stock with the highest yield that also grew net asset value is going to be QYLG, the Global X NASDAQ 100 cover call and growth ETF. And we can see over the last year it's up by about 2.84%.

So let's go ahead and take a look on Yield Canary at this fund QYLG and see exactly what we can learn. We can see the Canary status as watch and the true income yield if we look at the return of capital removed is sitting at about 14.26%.

Now here's what's interesting about this fund. If we scroll down, take a look at the distribution history for the fund. Here's what I love about this fund. We can see the cumulative yield has grown substantially since the fund's inception, and the vast majority has not been a destructive return of capital.

But what's interesting is you'll notice a few very large distribution payments. One here at the very beginning of 2022, one here again at the very beginning of 2025, and then again, another one right here at the very beginning of 2026.

Why is this the case? Why do we see these massive distributions made at the very beginning of the year? Well, you have to understand the structure of this fund and what they're doing and why they're optimizing it for their investors.

If we look at the fund's website, QilG, notice they have three different goals. Yes, high income potential, upside potential, and monthly distributions. But here's what we really need to understand.

We make note of this on the covered call ETF database. If we zoom in quite a bit and scroll over, one of the things you'll notice is the portfolio options coverage for QYLG is sitting at 50%.

This is something that they note on the website. By writing calls on 50% of the portfolio, the strategy allows investors to capture half the upside potential of the underlying index.

So, this fund is specifically designed in a way where it can take more part in the upside potential.

So, what happens as a result with the share price or net asset value increasing? Remember, they're writing options on the net asset value. So, with that net asset value increasing, when they write options on it, it becomes easier to generate larger distributions.

So, distributions can actually grow over time for some of these funds if their net asset value is increasing.

But what about these large distributions made at the end of a few different years? Why is that the case? Well, here's what you need to understand. To avoid being taxed at the corporate level, the fund must distribute at least 90% of its taxable income and realized capital gains to shareholders each year.

So throughout the year, QLG pays monthly option income distributions, which come from the call premiums it collects. If the fund also realizes additional capital gains from selling appreciated stocks, and those gains push its total taxable income above what's already been paid out, then it's legally required to play what you could call catch-up by distributing the remainder before the year end.

So, here's the irony of this. This does look odd, but this happens as a result when the fund has an absolutely incredible year. Because they have so much unrealized gains and they sell stocks, they have to make large distributions to their shareholders.

So when you look at the share price, you can see right here right at the end of 2025 and beginning of 2026, there was a large decline in the share price of the fund. Why is that the case?

Well, it's because that's exactly when they made that large distribution. Remember, the distributions are paid out of the net asset value. So don't forget that.

Now, part of the reason this fund has done so well is because they do have a heavy allocation to technology. In fact, about 60% of the fund is allocated to tech. So if we look at these top 10 holdings, we have companies like Nvidia, Apple, Microsoft, Micron, who's obviously done exceedingly well this year.

Amazon, AMD, Alphabet, Google's parent company, Tesla, and Broadcom. Stocks that over the past few years have done exceedingly well.

And when you consider the fact they're only writing options on 50% of the underlying portfolio, yes, they're able to take a large part in the upside, which again is why they've been able to make large distributions, which has ultimately turned Global XYLG into the highest yielding fund that has also seen positive net asset value over the last year in the dividendology covered call ETF database.

Now, we do need to note when we look at IWI, scroll all the way over, you will notice they use a more aggressive portfolio coverage strategy. It's typically between 75 and 100%.

So, over the long term, there probably would be less upside relative to a fund like QYLG who has less portfolio coverage.

But also note, there's a different option strategy. QLG is using those at the money calls while IWMI is using out of the money calls. So just to briefly explain what that actually looks like in theory, at the money calls typically has higher premiums but caps a lot more of the upside, is optimal in sideways or slightly bearish markets.

Meanwhile, out of the money is typically going to provide lower premiums but still allows some more of the upside and is better in bullish markets. So that's a very basic overview of those two option strategies.

In fact, this is very similar to QYLG. However, there is a difference. And the main difference between QYLG and QQQI again is going to be that portfolio options coverage. If we zoom all the way over, QQQI typically runs close to 100% portfolio options coverage.

Meanwhile, QLG is sitting at 50%. So that's a major difference.

Theoretically, if this plays out the way it should in theory, Qilg would likely have a little more share price appreciation, but QQQI in a lot of instances is likely going to be able to produce a higher yield.

That wasn't the case over the last year, though. But a large reason why is simply because QyG has had so much in unrealized gains that they had to distribute out as income due to tax purposes like we highlighted earlier.