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 September 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 September 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 of the August 21 – September 18, 2026 Roll Period
Covered Call ETFs
- Premiums Lifted XYLD and QYLD Above Their Reference Indexes as Large-Cap Momentum Slowed: After advancing 3.02% in the August roll period, the S&P 500® declined -0.21% from August 21 through September 18.1 Meanwhile, the Nasdaq 100® returned 1.20%, down from 2.56% in the roll period prior.2 The weaker trajectory reflected a series of macroeconomic and monetary events, including an August core Consumer Price Index that rose 0.3%, month over month, versus an expected 0.2%. This fueled expectations for a rate hike at the Federal Reserve’s (Fed) September meeting that ultimately came to fruition. Oil prices also rose as the war in the Middle East continued, which influenced the inflation picture. Collecting option premiums of 1.49% and 2.36%, respectively, at the start of the roll period, XYLD and QYLD were able to outperform their reference indexes by 1.23% and 1.26%.3
- Changing Sentiment Around Rates Pressured the Russell 2000, But RYLD’s Premiums Softened the Blow: Small-cap companies are known to be more likely to carry floating-rate debt, so their higher policy rates have the potential to force a repricing of their interest costs more rapidly. At the same time, the Russell 2000 bears meaningful exposure to industries like regional banks, industrials, and small emerging tech companies that bear the potential to express heightened rate sensitivity. To that end, the index lost -5.07% of its value in the September roll period as expectations around interest rates changed.4 In this environment, RYLD also experienced a negative return. However, it was buffered modestly by the 2.09% premium that it collected on August 21, losing -3.32% on a total return basis.5
- Rangebound Equities Kept Volatility and Option Premiums Low: In the face of pressure from the changing rate backdrop and rising commodity prices, U.S. equities traded in a narrow range during the September roll period. It was the bond market that in fact faced the lion’s share of volatility. The Cboe Volatility Index (VIX) closed at 14.32 on September 3, its second-lowest close year to date in 2026.6 Meanwhile, the Cboe Nasdaq 100 Volatility Index (VXN) settled at 19.29 on September 18, marking its lowest close since January 9.7 The relatively flat trading environment kept option premium values largely subdued. That said, the rising cost of debt financing and geopolitical uncertainty may well continue to put pressure on U.S. markets in the weeks to come.
Covered Call & Growth ETFs
- Covered Call & Growth Strategies Lagged Their 100% Covered Counterparts: The Covered Call & Growth strategies write calls on about 50% of their portfolios, which lets them participate in about half of their reference asset's monthly upside. That structure costs the most when markets are flat or down, because the uncovered half earns no premium. In the September roll period, the major domestic equity indices experienced largely flat-to-down returns.8 The premiums that XYLG, QYLG, RYLG, and DYLG took in at the onset of the roll period still allowed them to outperform their respective reference indexes.9 However, the larger premiums that were taken in by XYLD, QYLD, RYLD and DJIA proved more meaningful drivers of relative outperformance.
- Rising Oil Prices Contributed to Long-Term Treasury Yields Trending Higher: The investment community has been grappling with the long-term inflationary impact of the closure of the Strait of Hormuz for the better part of the last six months now and military strikes reported by both parties involved in the conflict in the Middle East stoked further uncertainty in the September roll period. WTI Crude oil climbed to a high of $105.83 on September 16, up from $87.06 at the start of the roll.10 That week, the three-month rolling correlation between WTI Crude and the 10-Year U.S. Treasury yield rose above 0.65, its highest reading in 35 years.11 The trend underscored how heavily investors are considering oil prices when gauging sentiment around long-term rates. The 20-Year U.S. Treasury yield also rose 11 basis points during the roll period, to 5.37%, positioning TLTX to outperform the ICE BofA U.S. Treasury 20+ Year Bond Index by 66 basis points, returning 0.03%.12
- Crypto Covered Call & Growth Funds Captured Most of a Late-Period Rally: In the September roll period, BCCC and EHCC returned 4.84% and 8.81%, respectively, capturing 92% and 97% of the 5.27% and 9.12% gains that were posted by the Coin Metrics’ CMBI Bitcoin and Ethereum indexes.13 Through September 15, the indexes were down -1.51% and -0.35% before advancing through the end of the roll.14 Initial trepidation was likely felt as investors awaited a vote on the Clarity Act that ultimately failed to pass in the U.S. Senate. The act would have established a regulatory framework for digital assets by dividing oversight amongst agencies, but partisan deadlocks over government ethics provisions represented too much of a hurdle.
Income EdgeSM ETFs
- Low Volatility Raised Coverage Ratios, But EDGQ Still Outperformed A Rising Nasdaq 100: The Income Edge ETFs set their coverage ratios (the share of the portfolio on which the funds write calls) based largely on the volatility backdrop. Lower volatility typically leads to lower premiums, so in low volatility regimes they have to cover a higher measure of fund notional to support their target distribution rates. In the September roll period, equity volatility was trending near some of its lowest levels since EDGX and EDGQ were incepted in February of 2026. The Cboe Volatility Index (VIX) closed at an average level of 15.68 while the Cboe Nasdaq 100 Volatility Index (VXN) closed at an average level of 21.29, so EDGX and EDGQ maintained averaged weekly coverage ratios of 25.63% and 27.58%, respectively.15 Although this above-average measure of notional coverage caps more upside, the funds still outperformed their respective reference assets. EDGQ was particularly noteworthy in this instance, as the Nasdaq 100® still appreciated 1.20%, but the fund delivered a 1.69% total return.16
- EDGQ Has Narrowed the Performance Gap on the Nasdaq 100® in Recent Months: As the Income Edge ETFs pursue their target distribution rates, they expect to capture an element of the upside that is associated with their reference indexes, as well. This proved challenging in the second quarter of 2026 for EDGQ after the Nasdaq 100® returned a sizable 27.73%.17 In that quarter, the fund returned 22.54%.18 So it has since been playing a bit of catch-up. In the third quarter, the market has provided it the ability to do just that. From June 30 through the end of the September roll period, the Nasdaq 100® has fallen -1.96% versus EDGQ’s -0.64% loss.19 The fund has leveraged its weekly call writing strategy to offset some of this downside with option premiums. At the end of the roll period, it was trailing the Nasdaq 100® by 2.38% since its February 17 inception date, growing 18.10%.20
- Weekly Resets Let Income Edge Adjust Coverage Quickly if Volatility Proceeds to Rise: With volatility still largely suppressed on the September 18 roll date, EDGX and EDGQ began the October roll period with coverage ratios of 26.19% and 28.75%, respectively, above their historic norms. That said, employment, pricing, and inflation data are all due out in the coming weeks, and the direction of geopolitical events remains difficult, which can lead to a sentiment shift amongst U.S. equities. Given this potential, the funds’ ability to reset their options positions weekly may prove impactful as EDGX and EDGQ seek to remain reactionary as the broader volatility backdrop takes shape.
All fund return data is based on fund net asset value. The performance data quoted represents past performance. Past performance and distributions do 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, QYLG, XYLG, MLPD, RYLG, RYLD, DYLG, DJIA, TYLG, EHCC, BCCC, TLTX, EDGQ, and EDGX. A portion of the distribution is estimated to include a return of capital.
Category:Income
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