ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Alternatives Channel
      • Artificial Intelligence
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Education
      • ETF Investing
      • ETF Strategist
      • Faith-Based Investing
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Invest Beyond Cash
      • Leveraged & Inverse
      • Modern Alpha
      • Portfolio Strategies
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Gold/Silver/Critical Materials
        • Crypytocurrency
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
    • Market Outlook
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Indexes
    • Scenario Analysis
    • Watchlists
    • Head-To-Head ETF Comparison Tool
    • Mutual Fund To ETF Converter
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • Gaining Perspective Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. ETF of the Week: RYLD, Global X Russell 2000 Covered Call ETF
News
Share

ETF of the Week: RYLD, Global X Russell 2000 Covered Call ETF

Elle Caruso FitzgeraldMay 18, 2023
2023-05-18

VettaFi’s vice chairman Tom Lydon discussed the Global X Russell 2000 Covered Call ETF (RYLD A) on this week’s “ETF of the Week” podcast with Chuck Jaffe of Money Life.

RYLD provides investors access to the small-cap market. The fund offers exposure to the Russell 2000 index with a covered call strategy, also known as a buy-write, on top of it.

“This is not above its 200-day average. This is not currently a trend-following opportunity,” Lydon said. “Although we did see [upward movement] after COVID in the small-cap area, it did give most of it back. With that being said, a couple of things are very advantageous with this ETF.”

Lydon highlighted RYLD as an opportunity to capitalize on small-caps’ attractive valuations right now. The P/E ratio of the S&P 500 is around 20. Meanwhile, the P/E ratio of the Russell 2000 is just 11.

“If you think you can get small-cap stocks at half the price of the S&P 500 — it just doesn’t happen that often. Historically, over time, small-caps outperform large-caps,” Lydon said. “If you’ve got money on the sidelines… well, here’s an option to get in and buy good stocks inexpensively.”


Content continues below advertisement

RYLD Offers an Attractive Yield

Investors in RYLD also get paid while waiting for small-caps’ recovery rally, Lydon said. RYLD’s covered call options strategy has provided a nearly 14% yield in the past 12 months. Currently, the distribution yield is about 12%, he added.

While the attractive yield may seem too good to be true to some investors, Lydon said that this is not an ultra-high yield strategy where you’re buying very low-quality paper.

“It’s got everything to do with a covered call or buy-write strategy that’s all inherent with this ETF,” Lydon said. “In this case, the yield is real, and it’s very attractive.”

Lydon noted that the yields don’t correlate with interest rates. Therefore, if the Fed is finished with hiking rates and rates go down, it doesn’t necessarily mean that the yield investors are getting from this covered call ETF is going to decline.

“Eventually, mid-caps and small-caps will catch up. I would say most people don’t have an allocation to small-caps, or if they do, it’s very, very small,” Lydon said. “You should have diversification to small-caps. If you don’t, this is a great option. You’d have the proper allocation [due to] the diversified index, but you also have a yield kicker on top of that.”

For more news, information, and analysis, visit VettaFi | ETFDB.

» Popular Pages

  • Tickers
  • Articles

May 19

Main Management Market Note: May 16, 2025

May 19

VIDEO: ETF of the Week: TXUE

May 19

CPSM Celebrates First Year of Delivering Downside Security

May 19

Healthcare Innovation Alive & Well in SBIO

May 19

How Bitcoin Works as a U.S. Equity Alternative

May 19

Weekly Economic Snapshot: Inflation Relief Meets Consumer Woes

May 19

Why Fixed Income ETFs Are Gaining Share

May 16

S&P 500 Snapshot: A Climbing Week

May 16

Why Fidelity’s Disruptive Automation ETF Looks Compelling

May 16

Treasury Yields Snapshot: May 16, 2025

QQQ

Invesco QQQ Trust Series I

VOO

Vanguard S&P 500 ETF

SPY

SPDR S&P 500 ETF Trust

GLD

SPDR Gold Shares

IVV

iShares Core S&P 500 ETF

VTI

Vanguard Total Stock Market...

SCHD

Schwab US Dividend Equity ETF...

CNBS

Amplify Seymour Cannabis ETF

VEA

Vanguard FTSE Developed...

SMH

VanEck Semiconductor ETF


Content continues below advertisement

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2025 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X