Cain, I have been looking for a way to create a grantor’s trust to pass some estate to my kids outside of probate. I know you are not a tax attorney, but maybe others here would help out. I wanted to do something that was VERY low annual maintenance where I would not have to file a tax return each year for the trust. Or at least not have to liquidate to pay taxes. Will getting ETF’s that use ROC (return of capital) do this job for me? High quality investments, low NAV erosion, low annual tax issues (at least till they are sold by my kids later on).
Hey Jeff, in theory a return of capital distribution still requires taxes to be filed unfortunately, regardless of the actual classification of the distribution. Although I could be wrong, I don't think these funds would be a good fit for this scenario, especially since the classification of the payout can change at any time.
Good piece and I agree with the focus on avoiding blind yield chasing. With these ETFs the key test isn’t NAV in the CEF sense, it’s whether total return stacks up once you account for what you’re giving up. Option income doesn’t come for free. You’re trading upside and beta for cash flow. The real question is whether long-run total return plus distributions justifies that trade versus simply holding the index. That’s the part I’d want to see quantified.
I invested in MLPI and CHPY in my Roth 401k brokerage account. I’m also looking at LFGY and the other two you mention here. Any thoughts on LFGY? I’m already very happy with MLPI as well as CHPY. Thanks!
Glad they've worked out for you! It's tough because LFGY really depends on the bull cycle starting again from crypto. It's hard to get that ticking right. I fear there's still a risk that crypto sees another pull back and it'll take LFGY a little lower!
Keeping an eye on it tho! Soon as we see crypto rally that's the time to enter in my opinion
really liking the NEOs funds. Currently have SPYI & QQQI as my core! Looking into adding MLPI
They're holding up really great. And I love the tax efficiency!
Cain, I have been looking for a way to create a grantor’s trust to pass some estate to my kids outside of probate. I know you are not a tax attorney, but maybe others here would help out. I wanted to do something that was VERY low annual maintenance where I would not have to file a tax return each year for the trust. Or at least not have to liquidate to pay taxes. Will getting ETF’s that use ROC (return of capital) do this job for me? High quality investments, low NAV erosion, low annual tax issues (at least till they are sold by my kids later on).
Hey Jeff, in theory a return of capital distribution still requires taxes to be filed unfortunately, regardless of the actual classification of the distribution. Although I could be wrong, I don't think these funds would be a good fit for this scenario, especially since the classification of the payout can change at any time.
Good piece and I agree with the focus on avoiding blind yield chasing. With these ETFs the key test isn’t NAV in the CEF sense, it’s whether total return stacks up once you account for what you’re giving up. Option income doesn’t come for free. You’re trading upside and beta for cash flow. The real question is whether long-run total return plus distributions justifies that trade versus simply holding the index. That’s the part I’d want to see quantified.
I invested in MLPI and CHPY in my Roth 401k brokerage account. I’m also looking at LFGY and the other two you mention here. Any thoughts on LFGY? I’m already very happy with MLPI as well as CHPY. Thanks!
Glad they've worked out for you! It's tough because LFGY really depends on the bull cycle starting again from crypto. It's hard to get that ticking right. I fear there's still a risk that crypto sees another pull back and it'll take LFGY a little lower!
Keeping an eye on it tho! Soon as we see crypto rally that's the time to enter in my opinion
Awesome. I appreciate the feedback and the perspective! Let’s keep an eye on it and watch for that crypto rally!