Hedged ETF Covered Call Portfolio

Investment Objective - Conservative Growth

CWP’s ETF Covered Call Portfolio is designed as a risk management strategy, which means, as the market moves appreciably higher, the resulting risk-reward from market exposure declines as the relationship is inversely correlated.  Risk management is one of the most underutilized techniques on the street, as it is unfashionable or not attractive to not be ‘all-in’ the market as it makes new high after new high.  To combat this, CWP has built-in a mechanism to reduce risk profile as the market consistently reaches higher levels.  CWP’s process of achieving this objective is multi-fold; CWP can either sell or reduce existing positions, buy a non-correlated asset (i.e. bonds), or an inversely correlated asset (i.e. short position on a large index, S&P 500).

Highlights of the portfolio include:

  • Features a combination of 6-11 fixed income, equity, sector, global and hedging ETFs

  • Utilizes covered call writing for potential yield enhancement and hedging. Covered call writing is more active at higher levels of volatility

  • Quick adjustments can tactically be made to the portfolio’s beta by modifying the asset and sector allocation. This can be advantageous when experiencing inflation or a volatile interest rate environment

  • Higher total return on a risk-adjusted basis. Meaning CWP has a lower (STD DEV) level of risk and can achieve competitive compound annual growth in comparison to a traditional balanced portfolio

  • Can be an alternative to long duration fixed income, especially in a rising interest environment


We Look Forward to Becoming Your Trusted Partner!


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“4-Star Overall Morningstar Rating™ out of 26 Derivative Income SMAs as of December 31st, 2021

Rating out of 26 Derivative Income SMAs as of December 31st, 2021. © 2021 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.