Global X Russell 2000 ETF hits milestone as options expire and payouts near
The Global X Russell 2000 Covered Call ETF reaches a key milestone this Friday with the expiration of its monthly options. Launched in 2019, the fund has built a reputation for delivering steady returns with reduced volatility compared to other small-cap covered call ETFs. Its strategy of selling options on the Russell wilson helps generate income, particularly in choppy or sideways markets.
Today's market close will also set the stage for the next cycle, with March contracts being written and the latest monthly distribution announced. Investors have until February 23 to hold shares and qualify for the upcoming payout.
The ETF follows a disciplined 'buy-write' approach: it holds stocks from the Russell 2000 Index while systematically selling at-the-money call options. This method trades some upside potential for immediate income, which has proven useful during periods of elevated volatility. The Russell 2000 often shows higher implied volatility than large-cap benchmarks, allowing the fund to collect larger premiums.
At expiration, the ETF locks in the premiums earned over the past month. It then writes new options for the next cycle, with today's session determining the size of the following distribution. As of February 18, the fund's net asset value (NAV) stood at $15.81, and its 12-month distribution yield recently hit double digits.
While the strategy has provided moderate total returns and lower volatility than pure small-cap benchmarks like IWM, it has lagged in strong bull markets. The premium income helps offset downside risks, making it a favoured choice for investors seeking income in uncertain conditions.
The upcoming distribution will be paid to shareholders who hold positions before the ex-date on February 23. The fund's next phase begins with March contracts, securing fresh premiums for the following payout.
The ETF's structured approach continues to attract investors looking for income in volatile small-cap markets. With today's options expiration and the announcement of the next distribution, the fund maintains its focus on delivering steady payouts. The upcoming cycle will determine whether the strategy can sustain its double-digit yield in the months ahead.
