Looking at your portfolio and feeling a distinct lack of income? Whether those just starting out or those close to retirement, investors of all types can benefit from a little more income coming from their investments. Finding the right ETF or fund to do so is the real task, and the stars may be aligning to encourage adding equity income right now with covered call ETFs powered by a daily option strategy.
See more: Tax-Loss Harvesting? Get More From Current Income in Daily Covered Call ETFs
Why now? There are a few specific reasons to consider daily covered call ETFs to close out 2025.
Declining Short-Term Interest Rates From Fed Rate Cuts
Falling interest rates have some important implications for portfolios. While they can provide some helpful stimulus to the macro economy, for investors, falling rates can also throw a wrench in their fixed income plans. Declining short-term interest rates can alter how investors’ debt securities perform, requiring other sources of income to step in.
Investors Can Tax-Loss-Harvest Into Income ETFs
The end of the year sees many investors and advisors engage in a healthy amount of tax loss harvesting. That doesn’t just present an opportunity to reduce the end of the year cap gains tax, but it also offers a case to swap from one ETF to another for a given allocation.
For example, investors may have positions in increasingly popular covered call ETFs. Many of the largest funds use a monthly options strategy, and have underperformed during the current market rally. Some strategies may also distribute more income than they produce in total returns, potentially creating a tax loss harvesting opportunity. Should any of those funds be producing a loss for portfolios, investors can take the loss by selling that fund and reinvest in covered call ETFs that use daily options, for example. These strategies typically capture more of the upside when markets rally.
