Global X Russell 2000 Covered Call ETF surrenders rally gains above call strikes, eroding returns versus the underlying index tracker.
The Global X Russell 2000 Covered Call ETF (RYLD) returned 11.52% year-to-date through July 10, 2026, lagging the iShares Russell 2000 ETF (IWM) by 8.72 percentage points. RYLD holds the same small-cap basket but sells at-the-money index calls, capping upside during rallies.
Over the past year, IWM gained 31.67% while RYLD returned 20.55%. The fund’s monthly payout has also declined from $0.31 to $0.15 per share since 2021 as lower volatility reduces option premiums. RYLD’s current short call position, valued at negative $26.75 million on a $1.32 billion fund, acts as a profit ceiling.
The performance gap reflects the hidden cost of RYLD’s covered call strategy, which is not disclosed as a fee on factsheets.