Active Income Investing Strategy

Active income investing through leveraged covered-call ETFs is a strategy focused on generating high, consistent cash flow by combining option premiums with enhanced exposure to equities.

These ETFs hold a portfolio of dividend-paying stocks and actively sell call options to collect income, while using modest leverage—typically around 25% to 50% —to increase the size of the underlying portfolio and, in turn, boost distributions.

The goal is to maximize monthly payouts, often reaching yields over 10%, making the strategy attractive to investors seeking immediate income rather than long-term capital growth. While the approach can be effective in delivering steady cash flow, it comes with higher volatility, potential for price erosion, and sensitivity to market swings, making it most suitable for income-focused investors who understand the trade-offs.