Despite the recent flood of criticism, I've been using 2 covered call funds for a number of years and feel they serve their function quite well within my portfolio. I do prefer funds which write calls to a nominal portion of the portfolio. DIVO (a Great Owl) and QQQX offer a 4.46 and 6.79% distribution respectively, which I do not reinvest.

The criticism is interesting considering some of the other things that are popular, and touted, around here.

Well, everyone has to do what they’re comfortable with. If I would show my top 5 holdings, folks here would think I’m nuts.

Bill Wilby, former portfolio manager for Oppenheimer Global Fund, is the featured guest this week.
He's concerned about "unknown unknowns."
Specifically, his major areas of concern are Private Equity (PE) and Private Credit.
S&P 500 leverage ratio is 1.6 while PE leverage ratio may be 5 or 6 (difficult to discern).
PE returns may decline significantly in the next 3 or 4 years.
Backward-looking endowments/pension funds will probably decide to pull back if this happens.
Wilby doesn't think this is a 2007/2008 caliber problem but doesn't know for certain since data is lacking.
Consuelo asked Mr. Wilby how investing has changed over the past 20 years.
Much more money is being run in quantitative strategies.
The public market has shrunk relative to the private market.
US debt to GDP ratio was probably 50% or 60% but is now at 120%.
The Fed balance sheet has grown 10 times during the past 20 years!
Not surprisingly, the market cap of gold (hedge against debasement?) has gone up 10 times as well.
Wilby owns individual stocks and cash (~70%/30% mix) while avoiding bonds in his personal portfolio.
His one investment for a diversified portfolio is AMSL which he also recommended last year.
I really enjoyed this episode.
https://wealthtrack.com/great-investors-retirement-portfolio/

Posters familiar with options know what they are doing.
But my concerns are the investors who have poor/no knowledge of options but are buying options-based funds thinking that they are all-weather income funds.
Call-writing (-selling or -shorting) funds are a bull market phenomenon. They turn capital gains (CGs) into options income, but don't protect the downside. They have grown like weeds in this bull market due to lots of marketing hype.
Moreover, the traditional application of call-writing uses boring but steadily growing (mature?) stocks that don't move around much. So, investors holding those boring stocks can write calls and boost income some with the call premiums. Call-writing on volatile things like QQQ, on the other hand, is nontraditional and counts on rising markets that trigger written calls again and again to transform possible LT-CGs into ST options income. You may want to hold these in tax-deferred/free accounts.
It isn't as if JPM has found some secret sauce for JEPI (AUM $34.8 billion, inception May 2020) and JEPQ (AUM $15.7 billion, inception May 2022). Granddaddy of options-based fund is GATEX / GTEYX that has been around since December 1977 (soon after options started trading in the US) and in those 46+ years, it has gathered an AUM of $6.6 billion. FWIW, it never impressed me much. Gateway is now a neglected part of French Natixis that also owns some more visible boutiques - Oakmark/Harris, Loomis Sayles.
Natixis https://www.im.natixis.com/en-us/home

@BaluBalu

If you are OK disclosing, what function do these funds serve within your portfolio?
Why do you own the covered call strategy on QQQ in a CEF? In your experience, what portion (in a range) of the portfolio does the manager write the calls on?

Simply put, I use both items simply as contributors to fully fund my annual spending via their distributions.
Why a CEF? I've owned QQQX for several years, and frankly, option overlays in an ETF wrapper weren't widely available at the time. There may be better options available currently, but this works for me and I'm comfortable with its longer track record and balance between distributions/asset growth.
As for portfolio coverage, Nuveen states: "During the quarter, the core
option overwrite level varied between 41% and 66% of the equity portfolio's value with an average level of 56%". Their option strategy is discussed in the attached link, which I found interesting.
https://documents.nuveen.com/Documents/Nuveen/Default.aspx?uniqueId=378e5e6a-448d-49f8-b723-f56fc1f5876c

I went to Kinnel's article in the OP in the hope of finding his screener so I can eliminate the fees and Manager investment criteria but restrict only to mid cap and large cap funds and re-run the screen.
I have not used M* screener in years. I could not maneuver the screener (under tools) in the new M* site. If anyone has a path to Kinnel's screen, please share.
I admit to not reading the rest of the thread.

Despite the recent flood of criticism, I've been using 2 covered call funds for a number of years and feel they serve their function quite well within my portfolio. I do prefer funds which write calls to a nominal portion of the portfolio. DIVO (a Great Owl) and QQQX offer a 4.46 and 6.79% distribution respectively, which I do not reinvest.

The criticism is interesting considering some of the other things that are popular, and touted, around here.

YBB, yeah when I read the official fact sheet I was less enthused than I sounded in my earlier post. Still a move in the right direction, though.
I am impressed with (voluntary) daily-disclosure ETFs from CG and TRP that launched in the past few years, though.

Despite the recent flood of criticism, I've been using 2 covered call funds for a number of years and feel they serve their function quite well within my portfolio. I do prefer funds which write calls to a nominal portion of the portfolio. DIVO (a Great Owl) and QQQX offer a 4.46 and 6.79% distribution respectively, which I do not reinvest.

I am not against covered call strategies when done right, though I never own any. I had looked at DIVO in a discussion with @WABAC and liked it.
If you are OK disclosing, what function do these funds serve within your portfolio?
Why do you own the covered call strategy on QQQ in a CEF? In your experience, what portion (in a range) of the portfolio does the manager write the calls on?
My questions are out of curiosity.

Despite the recent flood of criticism, I've been using 2 covered call funds for a number of years and feel they serve their function quite well within my portfolio. I do prefer funds which write calls to a nominal portion of the portfolio. DIVO (a Great Owl) and QQQX offer a 4.46 and 6.79% distribution respectively, which I do not reinvest.

FD1000,
Wow, there's lots to unpack in your commentary!
I'll just comment on two topics.
"Obamacare had a huge affect long-term."
You're correct that "Obamacare" had huge long-term effects:
1) More than 16 million Americans obtained coverage within five years' passage of Obamacare.
2) People with preexisting conditions can't he denied health insurance.
3) Prescription drug costs are more affordable for many Medicare participants.
4) More screenings and preventative services are covered with low copays or deductibles.
5) Insurance companies can no longer set lifetime limits for coverage.
"After the embarrassing exit from Afghanistan, Putin realized that Biden is a weak pres and why he invaded Ukraine."

Both Trump & Biden were eager to withdraw US troops from Afghanistan.
Trump struck a deal for withdrawal by May 1, 2021.
Biden inherited this deal but delayed the withdrawal date.
The withdrawal was problematic, to say the least,
but to blame this entirely on Biden is disingenuous.
https://www.factcheck.org/2021/08/timeline-of-u-s-withdrawal-from-afghanistan/
Edit/Add:
"On the first week of Biden's presidency, "Biden’s orders direct the secretary of the Interior Department
to halt new oil and natural gas leases on public lands and waters,
and begin a thorough review of existing permits for fossil fuel development.
Do you think the above has nothing to do why oil started to go up?
Oil is a huge resource in our economy, don't you think it increased inflation?"
Many different factors can influence oil prices.
You may want to contemplate potential causes before rushing to judgement and playing the "blame game."
https://usafacts.org/articles/what-impacts-the-price-of-oil/

No need to be extreme. The pres in office can have a big affect on many things.
Obamacare had a huge affect long-term. IMO, it was one of the worst legislation. I priced what healthcare would cost me and my wife prior to Medicare.
Before Obamacare it was $400 monthly with a $3K deductible.
After Obamacare it was $1200-1300 monthly with a $5-6K deductible. That was years ago. I know several people who pay now about $1000 per person and 7-9K deductible.
(link) On the first week of Biden's presidency, "Biden’s orders direct the secretary of the Interior Department to halt new oil and natural gas leases on public lands and waters, and begin a thorough review of existing permits for fossil fuel development.
Do you think the above has nothing to do why oil started to go up? Oil is a huge resource in our economy, don't you think it increased inflation?
After the embarrassing exit from Afghanistan, Putin realized that Biden is a weak pres and why he invaded Ukraine. He also did on Obama watch but not during Trump.
How much money does the US allocate to Ukraine? easy over $100 billion.
Why did 4 Arab countries sign a peace agreement with Israel during Trump, which is the first time ever, while the Middle East is on fire now?
When Harris said she wants price control, don't you think it would affect us in a big way?
So yes, several presidents are more influential than others.

From the article,
"In years where stocks declined, eg the global financial crisis in 2008 or the bear market in 2022, the call options expired worthless but did provide investors with additional income that reduced the drawdowns*."
*(YBB Note) By tiny amounts. Basically, covered calls didn't provide downside protection unless some puts were bought using the covered call income.

I will do this on positions with large gains that I wish to protect (ideally a zero-cost 'collar'), such as large dividend payers. I don't do it very often, but it can work well in that scenario. But CCs alone are rarely worth doing unless it's on a stock that doesn't really move very much -- which also means the premium you might get for the call makes it more trouble than it's worth.

It doesn't surprise me. Over the years, there have been many ways to try to beat a simple index such as VOO/VTI/QQQ, but can't do it over the long term. The beauty of it is the fact that it is based on the market, AKA the price. The price is what buyers are willing to pay regardless of someone's opinion, including valuation.
I have seen so many of these "special" funds fail again and again.
Remember, the price is the ultimate indicator = KISS and total returns is what matters because it includes everything.

C’mon FD. I was just trying to summarize Howard Marks’ rather well known approach to investing as he has elaborated on in scores of Oaktree “memos” over the years and also in several books. No intent here to advocate any particular approach or tell anyone else what might work best for them.
You make some fine arguments against deep value investing. I’d never argue with you. And I don’t think @Mark or anyone else would be offended if you want to pick apart the linked memo from Howard Marks and expose the fallacies in his thinking. You obviously know a lot more about investing than he does.

@hank "Marks is big on buying at a discount and holding long term."
FD: Millions tried the above while only a small % have done, Buffett. I have read his articles for a couple years, but he never helped me with my trading which is mostly in bond funds because....read what I said above, generalities and shades of gray.
Quotes from the article:
What this means is that in good times, investors obsess about the positives, ignore the negatives, and interpret things favorably. Then, when the pendulum swings, they do the opposite, with dramatic effects.
The human brain is wired to ignore or reject incoming data that is at odds with prior beliefs, and investors are particularly good at this.
Further complicating things in terms of rational analysis is the fact that most developments in the investment world can be interpreted both positively and negatively, depending on the prevailing mood.
Rarely do investors realize that (a) there can be a limit to the run of good news or (b) an upswing can be so strong as to be excessive, rendering a downswing inevitable. (FD; SPY,QQQ have been going strong for 15 years).
In short, sometimes the things that have gone up the most should be expected to continue to go up the most, and sometimes the things that have gone up the least should be expected to go up the most.
The above is meaningless unless you mention the specifics.
At least the best nugget by Buffet and Bogle = buy the SP500 for accumulators and go sleep for decades.

Marks is big on buying at a discount and holding long term. That’s his game. “Patience pays”, he would say. That philosophy seems at odds with what most seem to do today which is buy what’s done well recently. His specialty is distressed debt, but I think he would apply the same approach to equities, real estate or most any other risk asset. It probably helps if you’ve followed him over the years and are familiar with how he views investing.
I wasn’t sure @Crash meant to “dismiss” Marks. I took his “ Marks: Emotion? No. Analysis? Yes ” remark as a complement. Certainly, if Crash can listen to Larry Summers every Friday, he should find Marks relatively easy to fathom. :)

If you hold for years and diversified it's not for you.
+1.

Working hard and long hours in IT helps you in the long run...or...you can just be lazy and cry later why you didn't make the big bucks.
Of course, you can be lucky and do well.
I decided after about 12 years that I would never work more than 40-45 per week in IT and I did it at over 90-95%.
All my efforts went to investing...and it worked.

Well Crash, you dismissed it too quickly, maybe the new one is better
https://www.youtube.com/watch?v=ISntD4uLUdk&t=899s
You get real analysis, including bonds...just my own opinion. It can improve most investors trading, and it doesn't mean weekly trading.
If you hold for years and diversified it's not for you.

Thanks @Catch - I agree LQD has done much better over time. But look at the 2022 performance of the 2 funds.
While we can compare performance to other bond funds, I’m mostly interested in how the use of interest rate swaps to hedge rate sensitivity could blow up. Are there hidden dangers in this kind of hedging? On the surface it looks like a simple way to capture the difference between what Treasuries return and what investment grade corporates do. I’ve compared the return over 10 years to money market funds, short term bond funds and ultra-short bond funds. It seems to have done better - and on a reasonably consistent basis.