First Trust Launches a Small Cap BuyWrite Income ETF
First Trust has launched the First Trust Small Cap BuyWrite Income ETF (NYSE: FTKI), an actively managed ETF combining small cap equity exposure with an options strategy. The fund aims to generate current income and capital appreciation through a buy-write strategy that involves writing Russell 2000® Index or small cap equity ETF call options.
The strategy generates option premiums through selling call options, providing an additional income source beyond stock dividends. These premiums may be distributed to investors monthly. The fund targets income-oriented investors seeking exposure to small-caps with potential for higher income levels.
First Trust, serving as the fund's investment advisor, manages approximately $266 billion in assets as of January 31, 2025, through various investment vehicles including ETFs, closed-end funds, and mutual funds.
First Trust ha lanciato il First Trust Small Cap BuyWrite Income ETF (NYSE: FTKI), un ETF gestito attivamente che combina l'esposizione a piccole capitalizzazioni azionarie con una strategia di opzioni. Il fondo mira a generare reddito attuale e apprezzamento del capitale attraverso una strategia di buy-write che prevede la scrittura di opzioni call sull'indice Russell 2000® o su ETF di piccole capitalizzazioni.
La strategia genera premi da opzioni attraverso la vendita di opzioni call, fornendo una fonte di reddito aggiuntiva oltre ai dividendi azionari. Questi premi possono essere distribuiti agli investitori mensilmente. Il fondo si rivolge a investitori orientati al reddito che cercano esposizione a piccole capitalizzazioni con potenziale per livelli di reddito più elevati.
First Trust, in qualità di consulente per gli investimenti del fondo, gestisce circa 266 miliardi di dollari in attività al 31 gennaio 2025, attraverso vari veicoli di investimento tra cui ETF, fondi chiusi e fondi comuni.
First Trust ha lanzado el First Trust Small Cap BuyWrite Income ETF (NYSE: FTKI), un ETF gestionado activamente que combina la exposición a acciones de pequeña capitalización con una estrategia de opciones. El fondo tiene como objetivo generar ingresos actuales y apreciación de capital a través de una estrategia de compra-escritura que implica escribir opciones de compra sobre el índice Russell 2000® o sobre ETF de pequeñas capitalizaciones.
La estrategia genera primas de opciones mediante la venta de opciones de compra, proporcionando una fuente de ingresos adicional más allá de los dividendos de acciones. Estas primas pueden ser distribuidas a los inversores mensualmente. El fondo está dirigido a inversores orientados a ingresos que buscan exposición a pequeñas capitalizaciones con potencial para niveles de ingresos más altos.
First Trust, como asesor de inversiones del fondo, gestiona aproximadamente 266 mil millones de dólares en activos a partir del 31 de enero de 2025, a través de varios vehículos de inversión, incluidos ETF, fondos cerrados y fondos mutuos.
퍼스트 트러스트는 퍼스트 트러스트 스몰 캡 바이라이트 인컴 ETF (NYSE: FTKI)를 출시했습니다. 이는 소형주에 대한 노출과 옵션 전략을 결합한 능동적으로 관리되는 ETF입니다. 이 펀드는 러셀 2000® 지수 또는 소형주 ETF의 콜 옵션을 작성하는 바이-라이트 전략을 통해 현재 수익과 자본 상승을 목표로 합니다.
이 전략은 콜 옵션을 판매하여 옵션 프리미엄을 생성하며, 이는 주식 배당금 외에 추가적인 수익원으로 작용합니다. 이러한 프리미엄은 매달 투자자에게 분배될 수 있습니다. 이 펀드는 소형주에 대한 노출을 찾는 수익 지향적인 투자자를 대상으로 하며, 더 높은 수익 수준의 잠재력을 가지고 있습니다.
펀드의 투자 자문 역할을 하는 퍼스트 트러스트는 2025년 1월 31일 기준으로 약 2,660억 달러의 자산을 다양한 투자 수단을 통해 관리하고 있습니다. 여기에는 ETF, 폐쇄형 펀드 및 뮤추얼 펀드가 포함됩니다.
First Trust a lancé le First Trust Small Cap BuyWrite Income ETF (NYSE: FTKI), un ETF géré activement qui combine une exposition aux actions de petite capitalisation avec une stratégie d'options. Le fonds vise à générer des revenus courants et une appréciation du capital grâce à une stratégie de buy-write qui consiste à écrire des options d'achat sur l'indice Russell 2000® ou sur des ETF de petites capitalisations.
La stratégie génère des primes d'options en vendant des options d'achat, fournissant une source de revenus supplémentaire au-delà des dividendes d'actions. Ces primes peuvent être distribuées aux investisseurs mensuellement. Le fonds cible les investisseurs orientés vers le revenu à la recherche d'une exposition aux petites capitalisations avec un potentiel de niveaux de revenus plus élevés.
First Trust, agissant en tant que conseiller en investissement du fonds, gère environ 266 milliards de dollars d'actifs au 31 janvier 2025, à travers divers véhicules d'investissement, y compris des ETF, des fonds fermés et des fonds communs de placement.
First Trust hat den First Trust Small Cap BuyWrite Income ETF (NYSE: FTKI) eingeführt, einen aktiv verwalteten ETF, der die Exponierung gegenüber Small-Cap-Aktien mit einer Optionsstrategie kombiniert. Der Fonds zielt darauf ab, laufende Einkünfte und Kapitalwachstum durch eine Buy-Write-Strategie zu generieren, die das Schreiben von Call-Optionen auf den Russell 2000® Index oder Small-Cap-ETF umfasst.
Die Strategie generiert Optionsprämien durch den Verkauf von Call-Optionen und bietet eine zusätzliche Einkommensquelle über die Dividenden von Aktien hinaus. Diese Prämien können monatlich an die Anleger verteilt werden. Der Fonds richtet sich an einkommensorientierte Anleger, die eine Exposition gegenüber Small-Caps mit Potenzial für höhere Einkommensniveaus suchen.
First Trust, der als Anlageberater des Fonds fungiert, verwaltet zum 31. Januar 2025 rund 266 Milliarden Dollar an Vermögenswerten durch verschiedene Anlagevehikel, darunter ETFs, geschlossene Fonds und Investmentfonds.
- New income-focused ETF product launch expanding First Trust's portfolio
- Monthly income potential through option premiums
- Dual income streams from both dividends and option premiums
- Strategy aims to protect against market volatility
- Options strategy may limit upside potential in rising markets
- Risk of forced stock sales to settle options
- Potential for reduced tax efficiency due to options trading
- Complex strategy involving derivatives risks
An actively managed ETF that combines exposure to small cap equities with an option strategy
Generating income while protecting an investment portfolio from unpredictable market swings can be a challenge. However, buy-write strategies, which seek higher levels of portfolio income and protection against short-term volatility, may help investors achieve those goals. FTKI’s buy-write strategy generates option premiums by writing (selling) Russell 2000® Index or small cap equity ETF call options. These option premiums generate an additional source of income in addition to the dividends paid by the underlying stock portfolio. The potential additional cash flow from the options premiums may be distributed to investors on a monthly basis.
“Income-oriented investors have sometimes overlooked allocations to small-cap stocks, where dividends are often sparse,” said Ryan Issakainen, CFA, Senior Vice President and ETF Strategist at First Trust. “We believe FTKI could offer an effective solution for those seeking exposure to small-caps alongside the potential for a relatively high level of income.”
For more information about First Trust, please contact Ryan Issakainen at (630) 765-8689 or RIssakainen@FTAdvisors.com.
About First Trust
First Trust is a federally registered investment advisor and serves as the fund’s investment advisor. First Trust and its affiliate First Trust Portfolios L.P. (“FTP”), a FINRA registered broker-dealer, are privately held companies that provide a variety of investment services. First Trust has collective assets under management or supervision of approximately
You should consider a fund’s investment objectives, risks, and charges and expenses carefully before investing. Contact First Trust Portfolios L.P. at 1-800-621-1675 or visit www.ftportfolios.com to obtain a prospectus or summary prospectus which contains this and other information about a fund. The prospectus or summary prospectus should be read carefully before investing.
Risk Considerations
You could lose money by investing in a fund. An investment in a fund is not a deposit of a bank and is not insured or guaranteed. There can be no assurance that a fund's objective(s) will be achieved. Investors buying or selling shares on the secondary market may incur customary brokerage commissions. Please refer to each fund's prospectus and Statement of Additional Information for additional details on a fund's risks. The order of the below risk factors does not indicate the significance of any particular risk factor.
Unlike mutual funds, shares of the fund may only be redeemed directly from a fund by authorized participants in very large creation/redemption units. If a fund's authorized participants are unable to proceed with creation/redemption orders and no other authorized participant is able to step forward to create or redeem, fund shares may trade at a premium or discount to a fund's net asset value and possibly face delisting and the bid/ask spread may widen.
A fund's use of call options involves risks different from those associated with ordinary portfolio securities transactions and depends on the ability of a fund's portfolio managers to forecast market movements correctly. As the seller (writer) of a call option, a fund will tend to lose money if the value of the reference index or security rises above the strike price. When writing a call option, a fund will have no control over the exercise of the option by the option holder and the American style options sold by a fund may be exercised at any time before the option expiration date (as opposed to the European style options which may be exercised only on the expiration date). There may be times a fund needs to sell securities in order to settle the options, which may constitute a return of capital and make a fund less tax-efficient than other ETFs. Options may also involve the use of leverage, which could result in greater price volatility than other markets.
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Equity securities may decline significantly in price over short or extended periods of time, and such declines may occur in the equity market as a whole, or they may occur in only a particular country, company, industry or sector of the market.
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The portfolio managers of an actively managed portfolio will apply investment techniques and risk analyses that may not have the desired result.
Market risk is the risk that a particular security, or shares of a fund in general may fall in value. Securities are subject to market fluctuations caused by such factors as general economic conditions, political events, regulatory or market developments, changes in interest rates and perceived trends in securities prices. Shares of a fund could decline in value or underperform other investments as a result. In addition, local, regional or global events such as war, acts of terrorism, spread of infectious disease or other public health issues, recessions, natural disasters or other events could have significant negative impact on a fund.
A fund faces numerous market trading risks, including the potential lack of an active market for fund shares due to a limited number of market makers. Decisions by market makers or authorized participants to reduce their role or step away in times of market stress could inhibit the effectiveness of the arbitrage process in maintaining the relationship between the underlying values of a fund's portfolio securities and a fund's market price.
Large inflows and outflows may impact a new fund's market exposure for limited periods of time.
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Securities of non-
A fund and a fund's advisor may seek to reduce various operational risks through controls and procedures, but it is not possible to completely protect against such risks. The fund also relies on third parties for a range of services, including custody, and any delay or failure related to those services may affect the fund's ability to meet its objective.
The prices of options are volatile and the effective use of options depends on a fund's ability to terminate option positions at times deemed desirable to do so. There is no assurance that a fund will be able to effect closing transactions at any particular time or at an acceptable price.
A fund's investment in equity securities and written call options are not correlated, meaning the performance is independent of one another. Market events may impact one position held by a fund more than the other position and the returns from a fund's investments in equity securities and written call options may not move in the same direction as one another.
High portfolio turnover may result in higher levels of transaction costs and may generate greater tax liabilities for shareholders.
The market price of a fund's shares will generally fluctuate in accordance with changes in the fund's net asset value ("NAV") as well as the relative supply of and demand for shares on the exchange, and a fund's investment advisor cannot predict whether shares will trade below, at or above their NAV.
A fund with significant exposure to a single asset class, country, region, industry, or sector may be more affected by an adverse economic or political development than a broadly diversified fund.
Securities of small- and mid-capitalization companies may experience greater price volatility and be less liquid than larger, more established companies.
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Trading on an exchange may be halted due to market conditions or other reasons. There can be no assurance that a fund's requirements to maintain the exchange listing will continue to be met or be unchanged.
A fund may hold securities or other assets that may be valued on the basis of factors other than market quotations. This may occur because the asset or security does not trade on a centralized exchange, or in times of market turmoil or reduced liquidity. Portfolio holdings that are valued using techniques other than market quotations, including "fair valued" assets or securities, may be subject to greater fluctuation in their valuations from one day to the next than if market quotations were used. There is no assurance that a fund could sell or close out a portfolio position for the value established for it at any time.
First Trust Advisors L.P. (FTA) is the adviser to the First Trust fund(s). FTA is an affiliate of First Trust Portfolios L.P., the distributor of the fund(s).
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Definitions
An option is a contractual obligation between a buyer and a seller. The buyer of a call option has the right, but not the obligation, to purchase an agreed upon quantity of an underlying asset from the writer (seller) of the option at a predetermined price (the strike price) within a certain window of time (until the option’s expiration).
A premium is the income received by an investor who sells the option contract to another party.
The Russell 2000® Index is comprised of the smallest 2,000 companies in the Russell 3000® Index, which is comprised of the 3,000 largest and most liquid stocks based and traded in the
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Ryan Issakainen
First Trust
(630) 765-8689
RIssakainen@FTAdvisors.com
Source: First Trust Advisors L.P.
FAQ
What is the investment strategy of First Trust Small Cap BuyWrite Income ETF (FTKI)?
How often does FTKI distribute income to investors?
What are the main objectives of the First Trust Small Cap BuyWrite Income ETF?
How does FTKI's buy-write strategy work to generate income?
