Monthly Covered Call Commentary: September 2026

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 August 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 August 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 July 17 – August 21, 2026 Roll Period

Covered Call ETFs

• U.S. Equities Staged a Sharp Recovery: Major domestic equity indexes entered the Global X Covered Call ETF suite’s August roll period under pressure, but improving sentiment toward AI and a strong earnings season fueled a rapid recovery. Private asset manager Citadel’s acquisition of distressed assets from the Situational Awareness Fund, an AI-focused hedge fund, helped restore confidence in the AI trade after a meaningful semiconductor drawdown that took place from late June through July. Corporate results reinforced the shift: 485 of the 498 S&P 500® companies that reported second-quarter results through August 15 delivered aggregate top- and bottom-line Q2 growth of 14.99% and 52.12%, respectively.¹ Over the monthly roll period, the S&P 500® returned 3.02%, while the Nasdaq 100® gained 2.56%.²
• Falling Volatility Promoted Value for Written Options: Almost all of Global X’s 100% Covered Call ETFs outperformed their reference assets during the August roll period, with XYLD being the sole exception. Elevated volatility at the start of the period allowed QYLD to take in its highest premium since November 2025. Volatility subsequently fell sharply across the Cboe Nasdaq 100® Volatility Index (VXN), Cboe Russell 2000® Volatility Index (RVX), and Cboe Dow Jones Industrial Average Volatility Index (VXD). As a result, the value of the written calls declined, benefiting QYLD, RYLD, and DJIA’s returns. Combined with premiums of 3.74%, 2.38%, and 1.11%, respectively, collected on July 17, this helped the funds return 3.86%, 2.74%, and 3.02%, respectively, compared with 2.56%, 1.99%, and 2.31% for the Nasdaq 100®, Russell 2000®, and Dow Jones Industrial Average, respectively.³
• The August 21 Premium Values were Influenced by a Softer Volatility Regime: Lower market volatility resulted in more modest option premiums received at the start of the September roll period. The Cboe Volatility Index® (VIX) reached a year-to-date low of 14.25 on August 14 and remained relatively subdued despite rising modestly through the end of the roll period.⁴ Against this backdrop, XYLD collected a premium of 1.49%. DJIA also took in a premium of 1.03%. Meanwhile, QYLD, RYLD, and MLPD each collected more than 2%, allowing them to make distributions equal to their 1% monthly distribution cap.

Covered Call & Growth ETFs

• XYLG Outperformed its Fully-Covered Counterpart, XYLD: Maximizing premiums generally proved the more effective approach during the volatile August roll period, but XYLG was the exception among Global X’s index-tracking Covered Call & Growth strategies. The S&P 500® initially fell -1.88% through July 29 before rallying 4.99% through the end of the period.⁵ Volatile as their price movements might have been, neither the Dow Jones Industrial Average nor the Russell 2000® Index experienced such a sharp rebound. The Nasdaq 100® did, advancing 7.84% over the final 17 business days, but QYLD’s higher premium and the volatility decline discussed in our 100% Covered Call commentary helped it outperform QYLG.⁶ For the S&P 500®, however, XYLG’s greater upside participation drove stronger relative performance than XYLD.
• TYLG Exhibited Relative Outperformance During the August Roll Period: The information technology sector has remained volatile, and TYLG collected the highest premium in its more than three-year history on July 17. This helped the fund outperform its reference asset, the Information Technology Select Sector Index, during the August roll period, returning 4.88% versus 4.40%.⁷ Outside the sharp advance that the Index experienced from its March 30 trough to its June 2 peak, wherein it returned 55.43% versus TYLG’s 34.85%, TYLG has helped buffer tech volatility while still generating returns so far in 2026.⁸ Over the first three months of the year, the fund outperformed its reference asset by 3.63% (Information Technology Select Sector Index: -7.51%; TYLG: -3.88%).⁹ Since the Index’s June 2 peak, TYLG fund has outperformed by 4.69%, declining -2.70% versus the Index’s -7.39% decline.¹⁰
• Global X’s Covered Call & Growth Strategies Took Part in a Long-Awaited Advance for Crypto: From July 17 through August 18, the Coin Metrics’ CMBI Bitcoin and Ethereum Indexes posted modest gains of 0.88% and 3.91%, respectively.¹¹ Momentum accelerated on August 19, after the U.S. Treasury announced it would at least double the amount of longer-dated Treasury bonds that it would buy back from investors, from $2 billion to $4 billion per operation, between September 9 and November 4. Markets interpreted the announcement as a sign of mounting sovereign debt pressures, helping lift the two indexes by 19.28% and 26.21%, respectively, over the balance of the roll period.¹² Writing weekly call options on roughly half their notional value, BCCC and EHCC had been outperforming the indexes up until that point. From August 18 through August 21, they proceeded to underperform but were beneficiaries of the rally nonetheless returning 9.02% and 12.89%, respectively.¹³

Income Edge^SM ETFs

• A Floating Coverage Mechanism Allowed Income Edge^SM Managers to Position for the Market Recovery: As markets declined through July 29, EDGX and EDGQ were able to modestly outperform the Solactive GBS United States 500 and Nasdaq 100®, respectively, collecting weekly option premiums. Volatility rose toward a one-month high during this period. The Cboe Volatility Index (VIX) and the Cboe Nasdaq 100® Volatility Index (VXN) peaked at 20.66 and 30.84, respectively.¹⁴ The backdrop allowed the funds to collect premiums on July 31 of 0.16% and 0.25% and perform distributions of 0.17% and 0.25%, as well. All the while, they set the table for the upcoming week with initial coverage ratios of 24.08% for EDGX and 19.04% for EDGQ, preserving participation in the subsequent rebound. From July 31 through August 7, EDGX and EDGQ’s reference assets appreciated 3.72% and 5.12%, respectively, while the funds captured much of those gains, returning 2.95% and 4.35%, respectively.¹⁵
• The Funds Have Delivered Strong Relative Performance Since Inception: From February 17 inception through the end of this roll period, the Solactive GBS United States 500 and Nasdaq 100® have risen 13.25% and 19.06% on total return basis, respectively.¹⁶ In that time, EDGX and EDGQ have appreciated 12.16% and 16.14%.¹⁷ This performance is noteworthy given the mid single-digit losses that the indexes posted from fund inception through March 30, along with the market volatility that has been evident in the third quarter.¹⁸ Across their first 27 weeks, the funds have maintained coverage ratios at the start of each week that averaged 25.91% for EDGX and 25.42% for EDGQ. This implies that, each week, the funds have been positioned to take advantage of roughly 74.09% and 74.58% of the upside potential of the Solactive GBS United States 500 and the Nasdaq 100®, on average, plus the value of the premiums they take in.
• EDGX and EDGQ Continued to Capture Market Moves While Pursuing Targeted Distribution Rates: From their February 17 launch through the end of July, EDGX and EDGQ expressed upside capture ratios of 89.61% and 87.47% relative to the Solactive GBS United States 500 and Nasdaq 100®, respectively.¹⁹ Over the same stretch of time they’ve expressed downside capture ratios of 88.37% and 88.45% against the same indices.²⁰ The figures illustrate how closely the ETFs have performed relative to these reference assets in both up and down markets. The display of softer volatility coincides with the funds maintaining distribution rates of 9.15% for EDGX and 13.34% for EDGQ as of the end of the August roll period. 

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, EHCC, BCCC, EDGQ, and EDGX. A portion of the distribution is estimated to include a return of capital.