This is one way that a fund manager can try to enhance the income in a fund.

It works by them writing call options (the right to buy) on the shares that they hold within a portfolio. The logic is that the premium income generated boosts the overall income of the fund if the option is not exercised. The downside is that the underlying shares may have to be delivered to the holder of the call option if it is. As such, covered calls are viewed as somewhat bearish as the normal expectation is that they will not be used once written.