NASDAQ Covered Call ETF Selection Guide by Market Condition - When to Choose Which ETF

🎯 Bottom Line: No Absolute Winner

Comparing the 3 Korea-listed NASDAQ100 covered call ETFs (Tiger/Kodex/Rise), there is no absolutely superior ETF. Advantages completely shift depending on NASDAQ100's daily fluctuation levels.

📊 2025 Performance Proves It

Looking at year-to-date cumulative returns, without understanding option strategies, the return differences are so large it's hard to see them as "the same NASDAQ covered call ETFs."

Cause of Performance Gap

2025 Market Characteristics:

• Frequent volatile swings
• Many 1%+ gain days, especially after April
• Including a 12% single-day surge on April 9

In this market:

• Kodex (OTM): Most disadvantaged (1% ceiling)
• Tiger/Rise (ATM): Advantaged (90% upside participation)

🔍 ETF Selection by Market Condition

📈 Volatile Swing Markets (High Volatility)

Recommended: Tiger or Rise

Reasons:

• Can participate in 85-90% of NASDAQ gains
• Higher volatility = higher option premiums
• Pursue capital gains + high dividends simultaneously

Real example (April 2025):

• NASDAQ 12% surge day
• Tiger/Rise: ~10% gain
• Kodex: Maximum 1% gain

📉 Gradual Uptrends (Low Volatility)

Recommended: Kodex

Reasons:

• 100% participation if daily gains under 1%
• Superior upside participation vs ATM
• Lower premium but compensated by capital gains

Suitable markets:

• Steady 0.3-0.8% daily gains
• Stable uptrend without surges

↔️ Sideways Markets (No Direction)

Recommended: Rise

Reasons:

• Consistent premium from fixed 10% selling
• Dividends are key when no price movement
• No distribution cap limit

💰 Selection from Distribution Perspective

For Stable Distributions: Tiger

• Consistent monthly dividends with 15% target
• Predictable ~1.5% monthly

For Maximum Distributions: Rise

• No distribution cap
• High volatility months: 3%+ monthly possible
• But distributions decrease with low volatility

For Reinvestment Effect: Kodex

• 20% annual cap with excess auto-reinvested
• Long-term compounding effect expected

⚡ Practical Portfolio Strategies

Strategy 1: Diversification (Recommended)

Tiger 40% + Rise 40% + Kodex 20%

• When market direction is unpredictable
• Hedges strategy-specific risks

Strategy 2: Market Condition Response

Expecting volatile swings → Increase Rise/Tiger weight
Expecting gradual gains → Increase Kodex weight

• For active managers
• Requires market monitoring

Strategy 3: Dividend Maximization

Rise 70% + Tiger 30%

• Focus during high volatility periods
• Maximize monthly dividends

📅 Monthly Rebalancing Checkpoints

Monthly review items:

1. VIX Index: Above 20 favors Tiger/Rise
2. NASDAQ Daily Volatility: Frequent 1%+ moves favor ATM
3. Distribution Levels: Rise's distribution rate indicates market volatility

⚠️ Cautions

1. Don't be swayed by short-term performance

   • Due to option strategy nature, advantages cycle with market conditions
   • Maintain long-term perspective

2. Don't pick just one

   • Market prediction is difficult
   • Recommend diversifying across at least 2

3. Tax savings isn't the only goal

   • Invest alongside Korean stock covered call ETFs
   • Underlying asset diversification is essential

📝 Conclusion

NASDAQ covered call ETFs require thinking "which is favorable when" rather than "which is best."

• Volatile markets → Tiger/Rise
• Gradual uptrends → Kodex
• Uncertain → Diversify

Monthly dividend ETF investing shouldn't be solely about tax savings. Build a portfolio considering risk diversification and long-term growth. 🙏