Global X ETFs Europe has launched the first ETF tracking a covered call strategy on the EURO STOXX 50® benchmark, offering investors exposure to a portfolio of leading Eurozone equities that also generates income from selling options.
The Global X EURO STOXX 50 Covered Call UCITS ETF tracks the EURO STOXX 50® Covered Call ATM (“At the Money”) index, designed to reflect a hypothetical strategy in which an investor buys the EURO STOXX 50 and simultaneously sells a EURO STOXX 50 ATM call option, traded at Eurex.
The launch expands the collaboration between STOXX, a leading provider of benchmark and custom index solutions, and Global X ETFs Europe, a specialist in thematic growth, income, commodity and other strategies.
“The EURO STOXX 50 is the flagship Eurozone equity index, and we are committed to providing innovative solutions linked to it that support investor portfolio diversification,” said Axel Lomholt, General Manager at STOXX. “We are pleased to offer this index to Global X ETFs Europe. Our EURO STOXX 50 Covered Call ATM index can support the provision of an alternative income stream linked to our flagship benchmark for Eurozone equities.”
A hedging strategy
Covered call strategies serve as a hedge on a stock position held by an investor as it earns them the proceeds from writing the option. The investor forfeits stock gains if the price moves above the option’s strike price, resulting in underperformance in bull markets but usually outperforming in flat to falling markets. The ETF launch comes as European stocks have rallied this year but suffered heightened volatility — and losses — in March and April amid a global markets pullback.
Figure 1 shows how the income generated by a covered call strategy on the EURO STOXX 50 compares with the dividend yield on the index. The former can be several times higher, depending on the period.
Figure 1: Dividend yield vs. income yield – EURO STOXX 50
“Covered call strategies have provided a way for investors to receive an alternative income stream that is driven mainly by market volatility,” said Rob Oliver, Head of Global X ETFs Europe. “The EURO STOXX 50 Covered Call is our third covered call UCITS ETF product and may be attractive to investors looking to receive monthly income whilst being invested in European stocks.”
Global X ETFs, founded in 2008, has a global ETF lineup with approximately USD 96 billion in assets under management.[1] The Global X Nasdaq 100 Covered Call UCITS ETF (QYLD) was introduced in 2013 and currently commands more than USD 400 million in assets.
Growing EURO STOXX 50 ecosystem
A covered call on the EURO STOXX 50 benefits from the liquidity around the benchmark’s ecosystem, including options and futures that are among the most-traded listed derivatives in Europe and worldwide. The blue-chip benchmark underlies 42 billion euros in ETF assets.[2]
[1] Source: Global X, as of March 2025.
[2] Data as of February 2025.