The Global X Research Team is pleased to announce the release of its Monthly Covered Call Report, featuring the premium and distribution values attained by its roster of covered call and enhanced income funds in March of 2026. The key takeaways below, as well as those highlighted within the report, recap some of the most pivotal undertakings to have taken place across the markets during the March roll period. They outline their influence over the option pricing environment and help substantiate changing investor sentiments as characterized by specific market indicators.
Key Takeaways
Covered Call ETFs
- U.S. Equity Markets Maintained a Downward Trajectory During the March Roll Period: Equity markets entered the February 20th to March 20th roll period on unstable footing, pressured by rising uncertainty centered around the state of the labor market and expanding capital sending – particularly among mega cap tech firms. While the S&P 500® had recently reached a new high above 7,000 in late January, momentum faded quickly. Markets were further unsettled by geopolitical developments, including the escalation of conflict in the Middle East beginning February 28th, which drove commodity price spikes and dampened sentiment. As of March 20th, the war was still ongoing. At the same time, expectations for Federal Reserve rate cuts were repriced. As a result, major indices declined meaningfully during the roll period, with the Nasdaq-100® and S&P 500® falling -4.38% and -5.73%, respectively – marking one of the weakest periods since Liberation Day in April 2025.1
- Market Volatility Surged Alongside the Selloff: Market volatility rose sharply during the roll period, with the Cboe Volatility Index (VIX) peaking at about 34.7.2 This marks the highest volatility levels since April 4th, 2025, when tariffs were announced by the United States to be levied against many of its long-time trade partners. The move in volatility reflects increased uncertainty and wider dispersion in investor expectations for near-term market direction. After the calendar turned to March, the VIX held firm above the 20 level for the balance of the roll period.3 This promotes the potential to collect covered call option premiums in the near term.
- Option Premiums Have Represented a Buffer Against Market Downside: Global X’s 100% covered call strategies are structured so that they are fully exposed to the downside that may be incurred by the equities they hold, with options premiums received serving as a partial offset. As a result, all four ETFs that write calls on the major domestic equity indices generated negative returns during the March roll period, in line with declines across their reference assets. However, losses were more muted relative to their respective equity indexes. During the roll period, the Global X Nasdaq 100® Covered Call ETF (QYLD), Global X S&P 500® Covered Call ETF (XYLD), Global X Russell 2000 Covered Call ETF (RYLD), and Global X Dow 30® Covered Call ETF (DJIA) posted losses of -3.78%, -1.88%, -5.68%, and -6.86%, on a net asset value basis, respectively – outperforming the S&P 500®, Nasdaq-100®, Russell 2000, and Dow Jones Industrial Average, which experienced declines of -5.73%, -4.38%, -8.34%, and -7.95%, respectively.4 This extends the period of relative outperformance that these ETFs have been exhibiting to approximately six months, dating back to the September 19th roll date.
Covered Call & Growth ETFs
- Global X’s Equity Covered Call & Growth Strategies Are Only Partially Capped to the Upside: A core tenet of Global X’s Equity Covered Call & Growth family of ETFs is that they seek to write call options on only half the notional value of their portfolios. Relative to our strategies that seek to perform that function on 100% of their portfolio, this leaves the Covered Call & Growth funds in line to generate roughly half the option premiums. In down markets, like that which the investment community has witnessed so far in 2026, the impact of premium generation by a covered call strategy becomes evident, as the fully-covered strategies have proven more efficient mitigators of market downside. For instance, QYLD and XYLD have recorded net losses of -0.59% and -1.98%, year to date, based on net asset value through the end of the March roll period on March 20th, 2026, while our Global X Nasdaq 100® Covered Call & Growth ETF (QYLG) and Global X S&P 500® Covered Call & Growth ETF (XYLG) have returned losses of -3.01% and -3.37%, respectively.5 These figures still represent a relative outperformance versus the funds’ reference assets, but they illustrate the influence that premium generation can have on returns.6 The trade-off for the Covered Call & Growth funds lies in their ability to take part in a potential market recovery. On a monthly basis, these funds aim to realize roughly half the upside price appreciation of their reference assets, supplemented by option premiums.
- Treasury Markets Also Impacted by Volatility: Market volatility was not solely tied to equity instruments during the March roll period. In fact, from February 20th to March 20th the yield on the 20-Year Treasury security rose 30 basis points, to 4.97%, and the MOVE Index (a measure of U.S. Treasury volatility) rose to its highest point since April 30th, 2025.7 In this environment, the Global X Treasury Bond Enhanced Income ETF (TLTX) exhibited a net loss of -3.18%, compared to the ICE BofA U.S. Treasury 20+ Year Bond Index, which was down -3.64%.8
- Global X Introduced its Ethereum Covered Call ETF (EHCC) on April 1st, 2026: The fund is designed to operate in a similar fashion to that of the Global X Bitcoin Covered Call ETF (BCCC), obtaining long interest in Ether by purchasing at-the-money call and put options on an Ether ETP to establish near-1:1 exposure. It then writes at- or near-the-money FLEXible Exchange call options on a weekly basis on similar ETPs that are valued at approximately 50% of fund notional value. The fund aims to provide weekly distributions, as well, seeking to leverage the inherent volatility that exists for Ether to drive premium collection and potentially help mitigate volatility that might come with an otherwise uncovered position.
Income EdgeSM ETFs
- Global X’s Income EdgeSM ETFs Have Exhibited Consistent Distribution Streams: Operating their covered call option strategies utilizing weekly call options, the Global X Income EdgeSM ETFs wrote call contracts on five occasions over the stretch from February 20th, 2026, to March 20th, 2026, and, in conjunction with their stated policies, they also performed distributions each week over the course of that period. These distributions were fairly consistent across both the Global X U.S. 500 Income EdgeSM ETF (EDGX) and the Global X Nasdaq-100® Income Edge ETFSM (EDGQ), at 0.17% and 0.25% of the funds’ net asset value (NAV), respectively. A 0.18% NAV distribution in EDGX’s inaugural roll period on February 20th, 2026 represented the only modest deviation. On an annualized basis, EDGX and EDGQ target distribution rates of 9% and 13%, respectively.
- Notional Coverage Ratios Were Levered to Reflect Market Volatility: A defining feature of the Income EdgeSM approach is dynamic notional coverage in an effort to balance premium collection and price appreciation potential. Over the period, heightened volatility – driven in part by geopolitical developments such as the war in Iran – enabled the funds to generate meaningful option premiums while covering a smaller portion of their portfolios. This helped sustain distributions, partially offset equity declines, and, if continued at current levels, may preserve upside participation should conditions improve.
Market Volatility May Persist in the Near Term: So long as the War in Iran remains ongoing, market fluctuations may well be heavily tied to the news cycle. Further, a recent spike in oil prices represents a factor investors will be monitoring to evaluate its potential impact on prices and consumer spending capabilities. With idiosyncratic factors like geopolitics playing such a potentially influential role, the systematic-active nature of Global X’s Income EdgeSM strategies may prove interesting as their positioning adjustments potentially support both income generation and risk management. On March 20th, 2026, EDGX and EDGQ acquired premiums of 0.09% and 0.20%. Call options were written on 35.02% and 37.06% of the notional value of their portfolios, respectively.
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance current to the most recent quarter- and month-end is available at XYLD, QYLD, RYLD, DJIA, QYLG, XYLG, TLTX.