A week after launching its debut exchange traded fund, Madison Investments has listed a new active ETF. The Madison Covered Call ETF (NYSE Arca: CVRD) employs an active stock and active covered call writing strategy.
CVRD targets mid- and large-cap companies thought to be selling at reasonable prices in relation to their long-term growth rates. It then sells covered call options on a substantial portion of its portfolio securities. The fund aims to offer a diversified income stream with potential for capital appreciation. It seeks consistent total return while producing a high level of income and gains from options premiums and dividends.
Executive Committee Chair and Chief Distribution Officer Steven Carl said CVRD serves a “palpable demand” in the “current investment environment.”
“Given the current investment environment, there is a palpable demand for strategies that pursue both stability and performance differentiated from traditional benchmarks,” Carl said.
Portfolio managers Ray Di Bernardo and Drew Justman will manage the fund.
“With CVRD, we are extending our proven strategy to a broader audience drawn to the ETF format,” Di Bernardo said. “Our commitment to active management and a traditional, single-stock covered call approach offers a compelling strategy for investors searching for higher-yielding products.”
CVRD has an expense ratio of 0.90%.
Institutional-Caliber, Risk-Controlled Strategies
Today’s launch follows the listing of the firm’s first ETF, the Madison Dividend Value ETF (DIVL ). DIVL invests in dividend-paying stocks that exhibit above-market yield and growth potential. Madison Investments’ ETF suite is designed to help investors pursue income and capital appreciation by employing institutional-caliber, risk-controlled investment strategies.
“We have seen growing demand for actively managed ETFs in 2023,” said VettaFi’s head of research Todd Rosenbluth. “It is great to see Madison Investments build out a suite of products to meet advisors in the arena they want to invest.”
Madison Investments plans to expand its ETF suite with the launch of two active fixed income products. The firm will soon list Madison Aggregate Bond ETF (MAGG) and the Madison Short Term Strategic Income ETF (MSTI).
“Each active ETF utilizes a disciplined investment process to pursue consistent income and market-like growth with below-market risk,” Carl added. “We believe these funds are a testament to our legacy of providing investment strategies that balance return potential with risk management.”
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