"The Ugly Duckling of Bull Markets, Up More Than 13% in a Crash" ... The ETF Drawing Retail Investors
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- 2026-07-10 10:58:43
- Updated
- 2026-07-10 10:58:43
[Financial News] As volatility in the domestic stock market widens, investors' money is moving into covered call exchange-traded funds (ETFs). With the KOSPI swinging by nearly 10% in a short period and covered call ETFs posting double-digit returns, they are emerging as a defensive investment alternative.
Covered call high-dividend products post a sharp surge in returns over the past week
According to the securities industry on the 10th, most of the top-performing domestic ETFs over the past week were products that combine covered call and high-dividend strategies. The best performer was RISE 200 High Dividend Covered Call ATM, which rose 13.75%. By holding high-dividend stocks in the KOSPI 200 Index while applying a covered call strategy, the fund delivered strong returns in a volatile market.
SOL Financial Holding Plus High Dividend (7.01%), KODEX Shareholder Return High Dividend Stocks (6.34%), TIGER Bank High Dividend Plus TOP10 (6.30%), and KODEX Financial High Dividend TOP10 Target Weekly Covered Call (6.21%) also ranked near the top. Covered call ETFs that combine financial stocks with high-dividend names are being praised for their resilience even in a weak market.
A covered call ETF uses a strategy of selling call options, or the right to buy at a preset price, on the stocks or index it holds as underlying assets to earn option premiums. If share prices rise sharply, gains from further upside are limited. However, when prices move sideways or decline only modestly, the option premium can generate additional returns.
Strong defense in volatile markets, but relatively weak returns in bull markets
For that reason, these products are attracting investors who want to avoid stock market volatility. As a result, they have repeatedly appeared among the top performers even as the broader market has weakened.
The securities industry expects interest in covered call ETFs to remain strong, as market volatility is likely to stay elevated for the time being.
Still, experts say covered call ETFs are not a one-size-fits-all product that performs well in every market. If the stock market shifts into a strong uptrend, returns may lag behind those of conventional equity ETFs because of the option sales. They advise investors to choose based on market conditions and investment goals.
gaa1003@fnnews.com Ahn Ga-eul Reporter