Covered Call Strategy




Strategy Highlights

Guardian’s Covered Call Strategy is designed to achieve long-term capital appreciation and steady current income. The strategy invests primarily in large capitalization stocks that are considered undervalued and have a track record of dividend growth. In order to increase current income and preserve the potential for long-term capital appreciation, covered call option positions are maintained on all individual stock positions. As options are closed, expire, or are exercised, positions are rolled over in perpetuity or until the underlying stock is sold.


Investment Process
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Summary Statistics

Asset Class:Option WritingNo. of Holdings:20-30
Style:Fundumental ValueMax Position Size:6%
Benchmark:Value-Adjusted BXYSector Constraint:25%
Inception Date:December 31, 2013Annual Turnover:54.1%

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Guardian Investment Management claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared performance reports in compliance with the GIPS standards. Guardian Investment Management has been independently verified for the period of January 1, 2012 through December 31, 2017. Performance reports are available upon request.

Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.


Selected Research

Covered Calls for Higher Risk-Adjusted Returns


A 2004 study by Ibbotson & Associates concluded that a covered call strategy on the S&P 500 index produced higher risk-adjusted returns than a traditional buy & hold strategy. Download the study here.

Option Writing Can Reduce Left-Tail Risk


A 2012 study by Asset Consulting Group concluded that a covered call strategy on the S&P 500 index produced higher returns and reduced volatility and left tail risk compared to a traditional buy & hold strategy. Download the study here.

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