Global X Launches Pair of Covered Call ETFs | ETF Trends

On Wednesday, Global X expanded its lineup of ETFs with the launch on the NYSE of two new funds. Both the MLP & Energy Infrastructure Covered Call ETF (MLPD) and the S&P 500 Quality Dividend Covered Call ETF (QDCC) use covered call strategies.

“During volatile markets, elevated premiums can make covered call strategies especially appealing for investors seeking higher income and risk management,” stated Rohan Reddy, Global X ETFs director of research. “Global X is a long-time leader when it comes to exchange-traded covered call strategies, and these latest two offerings build on our leadership by offering income solutions to investors seeking access to MLPs or quality dividend equities.”

Energy Investment

MLPD uses covered call writing for the energy market to generate income and monthly distributions. To do so, the fund writes call options on the Global X MLP & Energy Infrastructure ETF (MLPX). This allows the fund to provide investors exposure to both energy infrastructure corporations and MLPs. MLPD has a net expense ratio of 0.60%.

“There’s a growing demand for alternative equity income strategies. The MLPX has been among the most popular energy ETFs of the year as far as net inflows, so investors now get the choice of putting an options overlay on top of that,” noted VettaFi Senior Industry Analyst Kirsten Chang.

S&P 500 Access

Inversely, QDCC aims to provide investor exposure to the S&P 500 through covered call options. The fund writes options on the Global X S&P 500 Quality Dividend ETF (QDIV). Global X positions QDCC as a fund that finds  positivity in volatility, while providing access to dividend-producing players within the S&P 500. The fund has a net expense ratio of 0.35%.

These funds are the latest additions to the growing count of Global X ETFs on the market. The issuer currently has over 90 ETFs listed in the U.S. The firm’s ETFs represent over $47 billion in assets under management.

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