WisdomTree Emerging Markets Ex-State Owned Enterprises Fund (XSOE) Covered Calls

The WisdomTree Emerging Markets ex-State-Owned Enterprises Fund (XSOE) is an exchange-traded fund that provides targeted exposure to emerging market companies while explicitly excluding state-owned enterprises (SOEs). By limiting government ownership to less than 20%, the fund aims to capture the growth potential of private-sector firms that are often more efficient and aligned with shareholder interests than their government-controlled counterparts.

You can sell covered calls on WisdomTree Emerging Markets Ex-State Owned Enterprises Fund to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for XSOE (prices last updated Tue 1:10 PM ET):

Want to make money with covered calls?  Sign Up For A Free Trial

XSOE offers a unique solution to the principal-agent problems often found in traditional broad-based emerging market indices. By filtering out companies with significant government ownership, the fund naturally shifts its portfolio toward "new economy" sectors—such as consumer discretionary, technology, and communications—which tend to be more dynamic and driven by rising middle-class consumption in developing nations.

The fund follows a rules-based index methodology that evaluates companies from a broad emerging markets universe. The resulting portfolio emphasizes companies with higher profitability and earnings growth potential compared to broader market indices that remain heavily weighted in inefficient, commodity-focused, or infrastructure-heavy state-run entities.

Competitive Landscape

XSOE competes within the diversified emerging markets category. Its primary advantages and competitive positioning include:

1. SOE-Exclusion Strategy: Unlike broad-market peers that hold large positions in state-controlled entities, XSOE’s mandate to exclude companies with more than 20% government ownership creates a distinct focus on the private sector.
2. Fundamental Quality: By tilting away from traditional "old economy" state-run industries, the fund captures firms that often demonstrate stronger return-on-equity (ROE) and faster revenue growth trajectories.
3. Peer Alternatives: The fund competes with broadly diversified emerging market ETFs, such as the iShares MSCI Emerging Markets ETF and the Vanguard FTSE Emerging Markets ETF. While these competitors offer cheaper, market-cap-weighted exposure, XSOE provides a specialized, factor-like tilt that differentiates its performance profile.

Strategic Outlook and Innovation

The strategic outlook for XSOE centers on the long-term potential of the private sector in emerging markets. As these nations transition toward consumption-led growth, companies that are not beholden to government mandates are better positioned to respond to market signals and consumer demand. The fund’s innovation lies in its systematic approach to improving corporate governance outcomes in the emerging market universe.

Looking forward, the fund remains a strategic tool for investors who desire exposure to emerging market growth but wish to avoid the inefficiencies and political risks associated with state-run capitalism. Its disciplined rebalancing ensures the portfolio remains focused on the most promising non-state-controlled leaders across the developing world.

Want more examples? XSMO Covered Calls | XSVM Covered Calls