Do Covered Call ETFs Deserve A Look?

Covered Call ETFs (or Buy-Write ETFs as they're known to some) are an intriguing option for investors looking to generate a little extra portfolio income. But you have to have some sense of where the market is heading in order to really profit from them.


Covered Call ETFs are generally known for their high yields. One of the largest covered call ETFs - the PowerShares S&P 500 BuyWrite Portfolio(NYSEARCA:PBP) - sports a trailing 12 month dividend yield of just over 4%. That number is actually low in the covered call ETF universe as smaller funds like the Recon Capital NASDAQ 100 Covered Call ETF (NASDAQ:QYLD) offer yields in the 8-9% range.

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