The Global X Research Team is pleased to release the distribution and premium numbers for our covered call ETFs for July 2023. Global X’s Covered Call suite of ETFs generally invest in the underlying securities of an index and sell call options on that index, an ETF tracking the underlying equity index, or a similar equity index. These strategies are designed to provide investors with an alternative source of income, while offering different sources of risks and returns to an income-oriented portfolio.
Click here to download the July 2023 Covered Call Report
Equity markets within the United States have maintained their relative strength over the last few weeks. Consequently, volatility metrics as characterized by the VIX and VXN volatility indexes have remained somewhat muted.1 Investor sentiment has been supported by economic data indicating declining levels of inflation and a solid start to the second-quarter earnings season, with some 77% of S&P 500 companies that reported during the roll period through July 21st announcing better-than-expected results.2,3 That said, rising equity values and improving consumer confidence has led the Federal Reserve to only modestly take a step back from its hawkish tone, and resilient employment data is promoting the sentiment that they will need to keep interest rates higher for longer.4, 5
In this environment, premium values associated with the Global X Covered Call suite modestly declined, owing to softer underlying implied market volatility. That said, the Global X Nasdaq 100 Covered Call ETF (QYLD) and the Global X Russell 2000 Covered Call ETF (RYLD) were able to make distributions up to their respective caps and, from a total return perspective, QYLD was able to outperform its equity index.6
1As a general guideline, the monthly distribution of QYLD, XYLD, RYLD, DJIA, QYLE & XYLE is approximately capped at the lower of: a) half of premiums received, or b) 1% of net asset value (NAV). For QYLG, XYLG, RYLG, TYLG, HYLG, & FYLG, the monthly distribution is approximately capped at the lower of: a) half of premiums received, or b) 0.5% of net asset value (NAV). The excess amount of option premiums received, if applicable, is reinvested into the fund. Year-end distributions can exceed the general guideline due to capital gains that are paid out at the end of the year.
For performance data current to the most recent month- or quarter-end or a copy of the Fund prospectus, please visit QYLD, QYLE, XYLD, XYLE, DJIA, RYLD, QYLG, XYLG, RYLG, TYLG, HYLG, FYLG.
Fund Premiums and Implied Index Volatility
Disclaimer: Options Premiums vs. Implied Volatility graphs include implied volatility for the Nasdaq 100, S&P 500, Russell 2000, and Dow Jones Industrial Average Indexes. QYLE, QYLG, XYLG, and RYLG write covered calls on these same, aforementioned equity indices, thus, their premiums are not displayed here. TYLG, HYLG, and FYLG have only rolled their options portfolios seven times while XYLE has only rolled its options portfolio four times, therefore Options Premiums vs. Implied Volatility graphs are currently not displayed for these ETFs and are expected to be added once more option premium data is received.
KEEP UP WITH THE LATEST RESEARCH FROM GLOBAL X
To learn more about our covered call options, read the latest research from Global X, including:
- Understanding the Income Landscape for Option Strategies
- Covered Call Strategies, Explained
- Risk Management Strategies for a Volatile Market Environment
Related ETFs
QYLD – Global X Nasdaq 100 Covered Call ETF
XYLD – Global X S&P 500 Covered Call ETF
RYLD- Global X Russell 2000 Covered Call ETF
DJIA – Global X Dow 30 Covered Call ETF
QYLG – Global X Nasdaq 100 Covered Call & Growth ETF
XYLG – Global X S&P 500 Covered Call & Growth ETF
RYLG – Global X Russell 2000 Covered Call & Growth ETF
TYLG – Global X Information Technology Covered Call & Growth ETF
HYLG – Global X Health Care Covered Call & Growth ETF
FYLG – Global X Financials Covered Call & Growth ETF
QYLE – Global X Nasdaq 100 ESG Covered Call ETF
XYLE – Global X S&P 500 ESG Covered Call ETF
Click the fund name above to view current holdings. Holdings are subject to change. Current and future holdings are subject to risk.