Madison Covered Call ETF (CVRD)

Overview

The fund is designed to provide investors with a focused approach to income generation and capital appreciation. It achieves its objectives through two main strategies: investing in dividend-paying equity securities and engaging in covered call writing to enhance returns. The fund maintains a strong orientation towards companies that distribute dividends, and it actively writes covered calls on a significant portion of its holdings to generate additional income. This dual strategy allows the fund to offer a balanced mix of income and potential for growth, suitable for investors looking for diversified exposure to income-generating investments. To ensure a high level of commitment to its core investment premise, the fund pledges to allocate at least 80% of its net assets, including borrowed funds meant for investment purposes, towards equity securities of dividend-distributing companies. This includes stakes in other investment vehicles that share a similar investment focus, thus providing a broad spectrum of opportunities within the dividend-paying universe.

Products and Services

The fund's primary offerings revolve around two central activities:

• Investing in Equity Securities:

This entails purchasing shares of companies that are known for distributing dividends to their shareholders. By focusing on equity securities of dividend-paying companies, the fund targets a steady income stream, coupled with the potential for capital appreciation over time. This strategy is designed to appeal to investors who are looking for consistent income, as well as those interested in long-term investment growth.

• Writing Covered Call Options:

As part of its strategy to enhance income, the fund engages in writing (selling) covered call options on a substantial portion of its portfolio. This approach allows the fund to earn additional income through option premiums, providing a supplementary revenue stream on top of dividends. Covered calls involve selling options on stocks that are already owned by the fund, which can help mitigate risk since the underlying securities are held in the portfolio. This method is particularly beneficial in periods of low to moderate market volatility, as it can help to smooth out returns and add an element of downside protection.