What Covered Call ETFs Can Do for Your Portfolio | ETF Trends

What Covered Call ETFs Can Do for Your Portfolio | ETF Trends

By Derek Horstmeyer, Reina Tran, and Tao WeiOften investors look at covered call strategies and marvel, is this the alpha producing strategy that I need to include to my portfolio? Now, financiers dont even have to build covered call techniques all on their own– numerous ETFs have popped up in the last years that develop and roll over the technique for a financier utilizing call options on the S&P 500, NASDAQ 100, and Russell 2000. Even when we compare the average covered call ETF to our bond index fund it underperforms on a threat changed basis (bond index fund had a Sharpe ratio of 0.88). Covered call ETFs did not have any significant better returns in any of these durations as compared to the S&P 500.

Now, financiers do not even have to build covered call strategies all on their own– multiple ETFs have popped up in the last decade that produce and roll over the strategy for a financier utilizing call options on the S&P 500, NASDAQ 100, and Russell 2000. Even when we compare the average covered call ETF to our bond index fund it underperforms on a danger changed basis (bond index fund had a Sharpe ratio of 0.88). Covered call ETFs did not have any meaningful much better returns in any of these durations as compared to the S&P 500.


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