Madison Investments Launches Covered Call ETF to Compete with JPMorgan’s Offerings

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Madison Investments, a newcomer to the ETF market based in Wisconsin, has introduced an actively managed covered call exchange-traded fund (ETF) named the Madison Covered Call ETF (CVRD). This fund enters the market to compete with JPMorgan Chase & Co.’s popular JEPI and JEPQ funds, targeting investors seeking a hedge against market downturns.

The CVRD ETF will primarily hold a focused portfolio comprising 30-60 stocks on which it sells in-the-money call options. This strategy aims to generate income for investors while offering a hedge against potential market declines. Madison Investments recently launched its first ETF, the Madison Dividend Value ETF (DIVL), on August 15.

Madison’s approach with CVRD emphasizes active management and transparency, distinguishing itself from larger competitors like JPMorgan’s JEP series. Unlike JPMorgan’s use of more opaque derivatives, CVRD sells individual call options for each stock in its portfolio. Additionally, CVRD maintains a more concentrated portfolio, including dividend-paying equity securities. At present, the ETF holds just over 30 stocks compared to JPMorgan’s JEPI, which holds 139 stocks.

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