The actively managed BlackRock Advantage Large Cap Income ETF (ticker: BALI), which began trading Thursday, is a relatively inexpensive way of tracking dividend stocks with a sort of yield-booster for which purpose it sells S&P 500 call options to generate additional payout streams.

Let’s remind that the base covered call strategy consists of buying a stock or basket of stocks and selling a call option on those same securities. The sale of the option contract provides the writer with a premium, which helps to lower the breakeven point on the underlying investment. The sale also generates current income.

The new BlackRock fund is similar to the $29 billion JPMorgan Equity Premium Income ETF (JEPI), which also tracks U.S. stocks and uses the call option strategy to generate a steady income stream. JEPI has jumped to the top of the active ETF charts after earning nearly $13 billion last year, beating the record set by Cathie Wood's Ark Innovation ETF (ARKK) in 2020, and is now on track to surpass that mark this February: its inflows to date are approximately $12.2 billion.

Its popularity sparked a wave of copycat funds. In addition to BALI, Goldman Sachs Group Inc. and REX Shares have applied for similar funds as JEPI continues to attract billions of dollars in funding.