Intro

This chapter explores the growing trend of covered-call ETFs, highlighting their benefits in achieving higher yields with reduced risk. It explains the mechanics of covered calls and discusses important considerations for retirees and income-focused investors.

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Episode notes

Daniel Sotiroff, senior manager research analyst for Morningstar Research Services, explains how covered-call ETFs work along with the popular investment’s risks and rewards.

On this episode:

What are covered-call ETFs, and how do they work?
Why are retirees and other income investors drawn to these ETFs? What’s making them so popular this year?
Their yields look very high. What is driving them?
What types of trade-offs are investors making?
ETFs are known to be tax-efficient investments. What are the tax considerations for covered-call ETFs?
Should you hold covered-call ETFs in a taxable or tax-deferred account?
What’s the optimal retirement account to hold covered-call ETFs?
Let’s talk about covered-call ETF performance in 2025. What have you’ve seen?
Which covered-call ETFs do Morningstar analysts consider a solid choice for investors, and why?

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