If you have been following the tech market lately, you have probably noticed that the Magnificent 7, the top companies in the U.S. technology sector, are commanding attention like never before. But what if you could stay invested in these companies and also collect extra income along the way? That is exactly what Vanguard's Global X Nasdaq 100 Covered Call ETF (NASDAQ:GPIX) aims to do. By blending stock ownership with a covered call strategy, GPIX gives income-seeking investors a new way to play tech growth without riding the full rollercoaster of volatility.

A Different Take on Tech Investing

Most ETFs are straightforward. You buy shares of companies, and your returns come from price appreciation and dividends. GPIX, however, adds a twist. It holds a concentrated portfolio of the Magnificent 7, including Apple Inc. (NASDAQ:AAPL), Microsoft Corp. (NASDAQ:MSFT), Amazon.com Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), Nvidia Corp. (NASDAQ:NVDA), Tesla Inc. (NASDAQ:TSLA), and Meta Platforms Inc. (NASDAQ:META), and sells call options on these stocks.

Selling options generates premiums, which the fund passes on to investors as regular income. This allows investors to benefit from price movement while receiving cash flow even when stock prices are stagnant. It is like getting paid to hold the companies you already want to own, which works within the structure of covered calls.

Income and Upside: Understanding the Trade-Off

Because the ETF sells calls, it limits some of the upside. If one of the tech giants rises above the option strike price, the fund may have to sell the shares, which reduces gains. On the other hand, in markets that are volatile or flat, the premiums collected act like a buffer, softening potential losses.

In simple terms, GPIX is not about chasing every tech rally. It is about balancing growth potential with more predictable income, which can appeal to investors who want exposure to the Magnificent 7 without enduring wild swings.

Performance and Risk

In early 2026, GPIX has delivered moderate returns by combining stock performance with income from options. It may not match a plain Nasdaq ETF during a strong rally, but in sideways or choppy markets it holds its ground. Think of it as a safety harness. It does not let you soar to the highest highs, but it helps keep your ride steadier when markets wobble.

The main risk is concentration. With heavy reliance on seven mega-cap stocks, a stumble in any one company can significantly affect overall performance. Another consideration is opportunity cost. During rapid tech rallies, investors may earn less than they would by holding a non-covered call ETF.

Who Might Benefit From GPIX

GPIX is best suited for certain investors. It works for those seeking income from tech through payouts from option premiums, moderate-risk growth investors who want exposure without full volatility, and anyone looking to diversify a portfolio with an equity product that behaves differently from standard growth ETFs.

With markets adjusting after rotation from mega-cap tech into mid-caps, energy, and industrials, GPIX allows investors to maintain tech exposure while managing risk.

Why GPIX Matters Now

Early 2026 has shown that tech can be unpredictable. Valuations remain high, and even the Magnificent 7 are not immune to sudden corrections. For investors who want to remain invested in top innovators while reducing short-term risk, GPIX offers a middle ground. By collecting premiums, it provides partial participation in growth with income to cushion volatility.

Additionally, with interest rates expected to remain moderate, income-focused equity strategies are gaining appeal. GPIX offers a higher yield than traditional bonds while keeping investors in companies driving AI, cloud, and e-commerce. It is a creative way to earn income without giving up growth potential.

Practical Considerations

Before investing, consider the following:

• Expense Ratio: GPIX charges 0.60 percent, which is higher than a standard S&P 500 ETF but reasonable for a covered call strategy.
• Taxes: Option premium income may be taxed differently than dividends, so consult a tax advisor.
• Upside Limitation: Gains from strong rallies in tech may be partially capped.
• Portfolio Fit: GPIX works best alongside other growth ETFs rather than as a single tech holding. Combining it with Vanguard Russell 1000 Growth ETF (NASDAQ:VONG) or Schwab U.S. Large-Cap Growth ETF (NYSE:SCHG) can balance income with full growth exposure.

Investor Insights

For those who want to stay close to tech's biggest names while generating income, GPIX is worth considering. Its covered call strategy provides reliable cash flow, smooths out volatility, and still allows participation in the long-term growth story of the Magnificent 7. It is not about chasing every rally, but about strategic participation with an income cushion. For the right investor, it blends growth and income in one package.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.

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