Buy-Write ETFs Mimic Covered Call Strategy | Page 2 of 2 | ETF Trends

“The options generate income that can cushion against potential losses and boost funds’ annual payouts, both features that are attractive to many income-oriented investors,” reported earlier this year.

Buy-write strategies were popular as investors scratched for yield in the years leading up to the financial crisis and the funds provided some cushion during the market meltdown, but the record has been mixed since then, according to the report.

The funds “did what they were supposed to do in 2008,” said Morningstar analyst Cara Esser in the article. Since then, “the strategy hasn’t been spectacular.”

PowerShares S&P 500 BuyWrite Portfolio