Income investors looking for a steady stream of dividend payments may want to consider covered call ETFs. These funds offer the potential for income generation through the sale of call options on underlying holdings.
This type of asset can work particularly well in a market that’s rising, as it allows investors to benefit from the market’s gains while also collecting premium income.
But it’s important to understand how these funds work before buying in and to weigh the benefits of an income stream against the potential for missed upside.
There are a number of covered call ETFs available today. For those looking for new ways to protect their retirement funds or simply seeking an income-generating strategy, we’ve compiled six of the best covered call ETFs on the market.
The Invesco S&P 500 BuyWrite ETF (PBP) is one of the most popular covered call ETFs on the market. It seeks to track the performance of the S&P 500 Index, while also generating income through the sale of options on the underlying stocks.
The Amplify CWP Enhanced Dividend Income ETF (DIVO) is a high-yield covered call ETF that seeks to provide investors with high income and capital appreciation.
The Nationwide Nasdaq 100 Risk-Managed Income ETF (NUSI) is a high-yield covered call ETF that invests in high-quality, high dividend-paying stocks from the Nasdaq 100 index.