XYLD - BXMX: Covered Call Fund - A Superior Choice To XYLD

2024-05-02 03:52:20 ET

Summary

• Nuveen S&P 500 Buy-Write Income Fund uses options to reduce volatility and increase income from its portfolio of global equities.
• The fund's top holdings are primarily large-cap stocks, with calls written on the entire equity portfolio.
• We tell you why this is a great time to switch to this fund if you own XYLD, a popular covered call ETF.

Our Protagonist

Nuveen S&P 500 Buy-Write Income Fund ( BXMX ) holds a portfolio of global equities. This closed end fund also sells calls on the S&P 500 index ( SP500 ) in an effort to dampen some of the volatility that comes with holding equities. Besides shielding it from equity market gyrations, the option premiums also add some extra juice to the income earned by the fund. The end game of this fund, as noted on its website , is to earn "attractive total return with less volatility than the S&P 500 index". Of course, the flip side of removing exposure to volatility is that the capital appreciation is also capped by the option strikes that are chosen....

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