OVERVIEW
Crossmark Covered Call Income strategy seeks to generate income, provide limited capital appreciation, and generate lower volatility than the broad equity markets. Crossmark uses a combined quantitative/fundamental approach to identify large-cap, dividend paying domestic stocks selling at a low range of valuation measurements which also exhibit positive price momentum. The strategy then supplements the overall portfolio’s dividend yield by implementing a covered call option overlay.
Snapshot
- Morningstar Category
- US Derivative Income
- Inception Date
- 10/1/2005
- Strategy Assets
- $583,642,889
- Investment Minimum
- $250,000
- Average Market Cap (M)
- $303,400
- # of Holdings
- 38
Composite Performance (%)
| Composite Performance (%) | Quarter | YTD | 1 Year | 3 Year | 5 Year | 10 Year | Inception |
|---|---|---|---|---|---|---|---|
| Crossmark Covered Call Income Wrap - Gross | -0.76 | 10.63 | 10.63 | 6.39 | 8.58 | 7.87 | 7.01 |
| Crossmark Covered Call Income Wrap - Net | -1.49 | 7.41 | 7.41 | 3.23 | 5.35 | 4.67 | 3.85 |
| CBOE S&P 500 BuyWrite Index (BXM) | 5.78 | 20.12 | 20.12 | 5.98 | 6.87 | 6.94 | 5.74 |
| Composite Calendar Year Performance (%) | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|---|---|
| Crossmark Covered Call Income Wrap - Gross | 10.63 | 16.09 | -6.21 | 18.44 | 5.83 | 21.25 | -4.47 | 16.20 | 7.10 |
| Crossmark Covered Call Income Wrap - Net | 7.41 | 12.69 | -9.11 | 14.98 | 2.60 | 17.75 | -7.37 | 12.79 | 3.96 |
| CBOE S&P 500 BuyWrite Index (BXM) | 20.12 | 11.82 | -11.37 | 20.47 | -2.75 | 15.68 | -4.77 | 13.00 | 7.07 |
Composite illustrated is the Crossmark Covered Call Income Wrap Composite.
Net performance was calculated using the hypothetical highest annual all-inclusive wrap fee of 3.00% by deducting .25% from each month’s return. Gross performance is shown as supplemental information and is stated as pure gross of all fees as the returns have not been reduced by transaction costs. Wrap fees include Crossmark’s portfolio management fee as well as all charges for trading costs, custody, and other administrative fees. Due to the effect of compounding, annual returns shown net of fees may be lower than the return that would be shown if the fee were deducted from the gross return at a single point in time.
Portfolio Managers
PAUL C. TOWNSEN
RYAN E. CAYLOR, CFA
Resources
The Crossmark Covered Call Income strategy invests in large-cap domestic equity securities and writes (sells) call options against the holdings in order to generate current income, provide investors with equity market participation, and reduce overall portfolio risk. The Crossmark Covered Call Income Wrap Composite is comprised of all discretionary, fee-paying, wrap fee accounts managed according to this strategy. The composite has a creation date and inception date of October 1, 2005. The primary benchmark for this composite is the CBOE S&P 500 Buy Write Index; this is a benchmark index designed to reflect the hypothetical return on a portfolio that consists of a long position in the stocks in the S&P 500 Index and a short position in an S&P 500 call option.
Index returns shown assume the reinvestment of all dividends and distributions.
The U.S. Dollar is the currency used to express performance. The performance reflects the reinvestment of dividends and other earnings to the extent that client accounts included in the composite elected to reinvest dividends and earnings. Performance figures shown gross of fees do not reflect the payment of investment advisory fees.
GIPS is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.
All Investments are subject to risks, including the possible loss of principal. Past performance does not guarantee future results. The Covered Call Income strategy may not achieve its objective if the managers’ expectations regarding particular securities or markets are not met. Equity investments generally involve two principal risks—market risk and selection risk. The value of equity securities will rise and fall in response to general market and/or economic conditions (equity market risk). The value of any individual equity security will rise and fall in response to the market’s perception of the issuer’s revenues, earnings, balance sheet, credit worthiness, business plan, and overall perception of the viability of the issuer’s business (selection risk).
Options are not suitable for every investor. Writing call options to generate income and to potentially hedge against market declines by generating option premiums involves risk. If the market price of a security increases, a call option written against that security limits the gain that can be realized. And, there can be significant differences between the securities and options markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve its objectives.
Crossmark Global Investments, Inc. (Crossmark) is an investment adviser registered with the Securities and Exchange Commission that provides discretionary investment management services to mutual funds, institutions, and individual clients. Investment advice can be provided only after the delivery of Crossmark’s firm Brochure and Brochure Supplement Form ADV (Parts 2A and 2B) and Form CRS, and once a properly executed investment advisory agreement has been entered into by the client. Crossmark claims compliance with the Global Investment Performance Standards (GIPS®). Prospective clients can obtain a GIPS Composite Report by sending a request to: advisorsolutions@crossmarkglobal.com.