Covered Call ETFs Available on the Tokyo Stock Exchange
What is a covered call?
While this may be an old explanation for option traders, I assume many of you do not deal with derivatives, so I will explain it simply.
A covered call is,
in a nutshell, an investment strategy where you hold assets such as stocks or ETFs while selling the right to buy those assets at a specific price in the future (a call option).
is what it is.
As the term “covered” implies, because you are selling options against assets you already own (cover), it is a defensive option strategy that does not carry the infinite risk of being stripped of everything in the worst-case scenario. Even if told that, it is hard to visualize, so I will explain it using limited-edition sneakers.
You have currently won a lottery for limited-edition sneakers worth 10,000 yen.
You think they might increase in value in the future, but you don’t expect much price movement for a while.
Then, a person named A (the option buyer) comes along and proposes the following:
“Please give me the right to buy those sneakers from you for 10,500 yen one month from now. In exchange, I will pay you 300 yen in cash right now as a premium for the right.”
You accept this condition and receive 300 yen on the spot. This is the start of a covered call.
At this point,
you have “10,000 yen sneakers” and “300 yen in cash” on hand.
One month later, your fate and A’s fate will diverge into the following two patterns depending on how the price of the sneakers has fluctuated.
Pattern A: If the price of the sneakers skyrockets to 12,000 yen
One month later, the value of the sneakers has risen to 12,000 yen.
At this time, A will naturally exercise the “right to buy for 10,500 yen.”
Since they can buy something worth 12,000 yen in the market for 10,500 yen, it is a great opportunity for A.
As promised, you must hand over the sneakers, which are now worth 12,000 yen, to A for 10,500 yen.
Your profit is
a sales profit of 500 yen on the sneakers (10,500 yen – 10,000 yen)
+ the 300 yen premium received initially = a total profit of 800 yen
Even though the sneakers themselves rose in value to 12,000 yen (if you had just held them, you would have made a 2,000 yen profit), your profit is fixed at 800 yen. In other words, “all capital gains above the pre-determined price (10,500 yen) are confiscated by A.”
Pattern B: If the price of the sneakers falls to 9,000 yen
One month later, the value of the sneakers has fallen to 9,000 yen.
At this time, A forfeits the “right to buy for 10,500 yen.”
This is because there is no point in buying sneakers for 10,500 yen just because of a promise when they can be bought in the market for 9,000 yen.
As a result, the transaction does not take place, and you are left with “sneakers that have fallen in value to 9,000 yen” and the “300 yen premium received initially.”
Your total profit/loss
unrealized loss of 1,000 yen on sneakers + 300 yen premium = a net loss of 700 yen
If you had just held the sneakers, the loss would have been 1,000 yen, but thanks to receiving 300 yen in cash (pocket money) at the beginning, the loss was mitigated to 700 yen.
What is the source of profit, the “option premium”?
In a covered call, the source of the high dividends paid out almost every month is this “option premium (income from rights).”
This is something with a completely different nature from dividends (a share of a company’s profits). The true nature of the premium is, so to speak, closer to “lottery ticket sales proceeds” or “receiving insurance premiums.” The option buyer (A in the example above) pays a premium to the seller (you) to buy the dream (right) that “maybe I can make a huge profit if it skyrockets.”.
ETFs that adopt a covered call strategy act as the ‘party selling lottery tickets to others (the house),’ which creates a mechanism for earning stable monthly cash income even if the stock price itself does not move. This is the biggest reason why they can achieve astonishing distribution yields of ‘10% to 15% or more per year,’ far exceeding typical high-dividend stocks.
6 Covered Call ETFs: Latest Distribution Yields
As of November 10, 2026.
I have confirmed the latest distribution history and market data.
First, let’s compare the yields based on actual distributions over the past year.
Source: TSE ETF yield list updated on November 10, distribution history for each ticker, and price data.
3 Tickers to Note Regarding Yield Figures
452A: 14.2%
This is a reference calculation using the total distribution of 114.8 yen over the past year and a price of 810 yen. Since there is a difference from the previous display on BlackRock’s official site, verification with the latest official distribution results is necessary.
576A: 12.0%
The recent distribution includes a large payment of 61 yen. Since the distribution history since inception is short, it is better not to assume that 12% will continue.
563A: 4.8%
The actual distribution over the past year is 44 yen. Since it has not been long since the start of operations, the annual yield has not yet matured. Please distinguish this from a projected yield simply multiplying the most recent distribution by 12. The target yield is 15%, so if operated smoothly, it is expected to be between 12% and 15%.
At this point, it is clear that the yield is overwhelmingly higher than the high-dividend ETFs introduced previously.
Covered call ETFs have a mechanism where you give up some of the capital gains of the underlying assets in exchange for receiving distributions.
For this reason, it is important not to choose them based solely on the high distribution yield.
1. Basic Comparison of 6 Tickers
2. Investment Characteristics of Each
2865: NASDAQ 100 Covered Call
Rather than aiming for large capital gains from the NASDAQ 100, it prioritizes income from option premiums
. It is prone to underperforming the regular NASDAQ 100 in a rising market.
Actual trust fee: approx. 0.6275% (including costs of underlying investments)
2868: S&P 500 Covered Call
Targets more diversified US large-cap stocks than 2865.
For investors who prioritize monthly distributions.
However, this also has limitations in capturing upside gains.
Actual trust fee: approx. 0.6385%
563A: NASDAQ 100 Daily Covered Call
Utilizes 1DTE (daily expiration options), adopts an index with a target premium of 15%.
It is characterized by a revenue design different from conventional types.
While expecting high distributions, be careful of price movements during sharp rises or falls.
Trust fee: approx. 0.2775%
452A: S&P 500 Premium Income
A strategy that holds the S&P 500 and sells monthly calls approximately 1% OTM.
Compared to 2868, it is designed to leave some room for upside growth.
Trust fee: approximately 0.495%
453A: U.S. Treasury 20+ Year Premium Income
A rare covered call ETF that uses long-term U.S. Treasuries as the underlying asset.
It has a source of income different from the stock market.
However, there is a risk that bond prices will fall significantly when long-term U.S. interest rates rise.
Trust fee: approximately 0.605%
576A: China Tech Covered Call
An actively managed fund targeting the Hang Seng TECH Index.
It is influenced by Chinese policies, the economy, and the stock price fluctuations of tech companies.
Among the 6 stocks, this is a product where you should be particularly cautious about political and regulatory risks.
Effective trust fee: approximately 0.7775%
3. Points I particularly want to compare
Rather than simply creating a yield ranking, it is better to evaluate these 6 stocks based on the following 5 items.
1. Distribution yield: How much cash income can actually be earned
2. Total return after dividend reinvestment: Whether assets are increasing including principal
3. Maximum drawdown: How much assets decrease during a market crash
4. Upside capture ratio: How much of the NASDAQ and S&P 500 gains can be captured
5. Interest rate/currency sensitivity: How it reacts to changes in U.S. interest rates and the dollar-yen rate
4. Toward investment decisions by the end of 2027
The tentative view is as follows.
However, this is not a purchase ranking. In particular, 563A requires the accumulation of operational track records.
What I most want to know is which ETF allows me to increase my principal while receiving distributions.
To conclude,
if you want to receive distributions while also aiming for principal growth,
the first ones to pay attention to are 452A and 2868.
However, if you prioritize principal growth, the ETF with the highest distribution yield is not necessarily the best.
Covered call ETFs have the following trade-offs.
・The more distributions you increase, the greater the potential for forfeiting upside gains from selling calls.
・If the market is flat, option income tends to work in your favor.
・In a strong bull market, it is likely to underperform standard stock index ETFs.・In a bear market, even with distributions, it cannot prevent a decline in the net asset value.
. In other words, what you should aim for is not high distributions, but
increasing assets through the sum of distributions and capital gains.
1. Principal growth potential ranking of the 6 stocks
A tentative evaluation based on the operational structure and confirmed performance as of November 10, 2026.
Why I rank 452A first
452A is a mechanism that holds the S&P 500 while selling monthly calls with a strike price approximately 1% above the underlying asset price.
It is designed to leave more upside room than ATM types like 2868.
・Earn distribution income
・Capture some of the S&P 500’s price appreciation
・Receive monthly distributions
The reference distribution yield as of November 10, 2026, is approximately 5.49%.
However, since it was established in November 2025, it will still take time to evaluate its long-term performance.
563A is a rival in growth potential
563A is a daily covered call strategy on the NASDAQ 100 strategy.
Even in the asset manager’s explanation, it is considered for investors who want to capture more of the NASDAQ 100’s upside than 2865 offers.
However, since it is a new ETF launched in April 2026, its long-term resilience to market crashes and principal growth potential cannot yet be determined.
2. However, there are points to note when looking at the track record
2865 has a dividend yield of approximately 10.5% over the last 12 months, but the
market price increase rate from the beginning of 2026 to November 9 is approximately negative 2.7%.
High dividends do not automatically mean the principal will grow.
As of September 2026, 2868 has a cumulative net asset value increase rate of approximately 57.6% since inception.
However, this figure does not include dividend reinvestment, so it must be distinguished from total return.
576A has also shown a decline in net asset value since inception, and at this stage, I do not consider it a primary driver for principal growth.
3. How I would use them differently
453A is not an equity ETF, but a 2% OTM strategy targeting U.S. Treasuries with maturities over 20 years. I consider it a separate allocation aimed at capturing falling interest rates, rather than part of an equity growth portfolio.
4. Recommended allocation
If I were to invest 6 million yen across 6 tickers, I would aim for a balance between principal growth and income as follows.
5. The most important verification
Before making a final purchase decision, I want to compare the following:
・Total return of the 6 tickers after dividend reinvestment
・Principal trend if dividends are received in cash
・Maximum drawdown in 2026
・Comparison with the S&P 500 and NASDAQ 100
・Expected return and maximum decline rate through the end of 2027
In particular, the core question is which of 452A and 563A can grow assets while receiving dividends.
In my opinion,
It is more rational in the long term to combine standard S&P 500 and NASDAQ 100 ETFs than to rely solely on covered call ETFs for asset growth.
Quantitative comparison of 6 tickers: Does the principal grow even if dividends are used?
First, I will standardize the comparison rules.
This time, I assume the following investor:
・Invests 1 million yen in 2026
・Receives all dividends in cash and uses them for living expenses, etc.
・Does not reinvest dividends
・Does not make additional investments
・Distinguishes between pre-tax and post-tax
・Evaluation date is November 10, 2026
The criterion is whether the holding value of the ETF, excluding dividends, exceeds the 1 million yen at the time of purchase.
This allows us to identify a state where “high dividends were received, but the principal decreased.”
Note that since daily net asset value and ex-dividend data for all 6 tickers could not be obtained under the same conditions, I will separate confirmed performance from unconfirmed data below. I will not fill in maximum drawdowns or similar metrics with estimates.
1. Confirmed performance
The main basis is as follows:
2865: Market price increase rate of 4.41% year-to-date 2026, as of November 5, 2026.
2868: Cumulative net asset value increase rate of 57.28% since inception as of September 10, 2026.
563A: Net asset value of 107,459 yen as of October 6, 2026,
compared to 100,000 yen at inception.
576A: Cumulative net asset value decline rate of negative 9.25% since inception as of September 10, 2026.
452A/453A: Inception date and operating conditions confirmed via BlackRock’s public documents.
2. Three tickers to pay special attention to
2868: Evaluating long-term performance
The 57.28% increase in net asset value since inception is attractive. If you can maintain the number of units held even after using the distributions, you can expect growth in the principal portion.
However, there is no guarantee that it will continue to increase at the same pace in the future.
563A: A new candidate for growth potential
The net asset value has risen since inception, and distributions have been paid. However, this is based on only about six months of performance. Its durability during a sharp NASDAQ decline has not yet been verified.
2865: A candidate for both income and principal growth
Price appreciation since the beginning of 2026 and an annual distribution record of 131 yen can be confirmed. It has a long track record and is important as a comparison target.
3. How to view an investment of 1 million yen
These are the two tickers for which we can currently make estimates using figures.
For these two tickers, at least during the period we were able to confirm, the principal portion has increased even after receiving and using the distributions.
However, this does not guarantee future principal maintenance.
4. Final selection
At this stage, I classify them as follows.
Important correction: Ranking 452A first initially was not sufficiently supported by performance data. It is not appropriate to conclude at this stage that 452A is superior to 2865 or 2868.
5. The next comparison to truly settle the matter
Finally, we need to prepare the following three things:
・Compare 6 tickers over a common period from May 28, 2026, to November 10, 2026.
・Compare the net asset value trends and maximum drawdown when the full distribution amount is used.
・Evaluate expected returns and principal maintenance probability by scenario through the end of 2027.
After-tax distributions are also particularly important.
In Japanese taxable accounts, a tax rate of 20.315% is generally applied to dividends and distributions from listed stocks, etc. (foreign tax credits, etc., are considered separately).