First Trust Announces Changes in Investment Strategies and Other Related Matters for First Trust Hedged BuyWrite Income ETF

Rhea-AI Summary

First Trust Advisors L.P. announced a strategic shift for the First Trust Hedged BuyWrite Income ETF (Nasdaq: FTLB), effective May 11, 2022. The Fund will change its name to "First Trust Nasdaq BuyWrite Income ETF" and its ticker symbol to "FTQI." The new strategy focuses on equity securities from U.S. exchanges, utilizing an option strategy of writing U.S. exchange-traded call options on the Nasdaq-100 Index. This approach aims to increase cash flow through option premiums while discontinuing the purchase of put options for downside protection.

Positive

• The new strategy aims to enhance cash flow through option premiums.
• The Fund will continue focusing on U.S. equity securities, maintaining a solid investment foundation.
• Change in ticker symbol to FTQI may attract renewed interest among investors.

Negative

• Discontinuation of put options may expose the Fund to greater downside risk in declining markets.

WHEATON, Ill.--(BUSINESS WIRE)-- First Trust Advisors L.P. (“FTA”) announced today that First Trust Hedged BuyWrite Income ETF (Nasdaq: FTLB) (the “Fund”), a series of First Trust Exchange-Traded Fund VI (the “Trust”), will change its investment strategy (“New Strategy”), name and other related matters, effective May 11, 2022. Although the Fund will continue to seek its current investment objective of current income, on May 11, 2022, the Fund will adopt an amended investment strategy that involves investing primarily in equity securities listed on U.S. exchanges and utilizing an “option strategy” consisting of writing (selling) U.S. exchange-traded call options on the Nasdaq-100 Index. Pursuant to the New Strategy, under normal market conditions, the Fund will invest at least 80% of its net assets (plus any borrowings for investment purposes) in the components of the Nasdaq Composite Index. The Fund will employ an option strategy in which it will write U.S. exchange-traded call options on the Nasdaq-100 Index in order to seek additional cash flow in the form of premiums on the options and the Fund will seek to distribute the majority of the option premiums collected. In addition, under the New Strategy, the Fund will no longer purchase exchange-traded put options to seek to provide downside protection and to reduce the Fund’s price sensitivity to declining markets. Currently, the Fund pursues its investment objective by investing in equity securities listed on U.S. exchanges of all market capitalizations and by utilizing an “option strategy” consisting of buying U.S. exchange-traded put options on the Standard & Poor’s 500 Index and writing (selling) U.S. exchange-traded covered call options on the Standard & Poor’s 500 Index. Concurrent with the New Strategy, the Fund’s name will change to “First Trust Nasdaq BuyWrite Income ETF” and its ticker symbol will change to “FTQI”. The Fund’s shares will continue to be listed for trading on The Nasdaq Stock Market LLC. The Fund’s CUSIP is not expected to change.

FTA is a federally registered investment advisor and serves as the Fund’s investment advisor. FTA 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. FTA has collective assets under management or supervision of approximately $201 billion as of April 30, 2022 through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and SMAs. FTA is the supervisor of the First Trust unit investment trusts, while FTP is the sponsor. FTP is also a distributor of mutual fund shares and exchange-traded fund creation units. FTA and FTP are based in Wheaton, Illinois.

This press release contains certain forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding the goals, beliefs, plans or current expectations of FTA and its respective representatives, taking into account the information currently available to them. Forward-looking statements include all statements that do not relate solely to current or historical fact. For example, forward-looking statements include the use of words such as “anticipate,” “estimate,” “intend,” “expect,” “believe,” “plan,” “may,” “should,” “would,” “will” or other words that convey uncertainty of future events or outcomes. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of a Fund to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. When evaluating the information included in this press release, you are cautioned not to place undue reliance on these forward-looking statements, which reflect the judgment of FTA and its respective representatives only as of the date hereof. No obligation will be undertaken to publicly revise or update these forward-looking statements to reflect events and circumstances that arise after the date hereof.

The Fund’s daily closing price and net asset value per share as well as other information can be found at www.ftportfolios.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220506005510/en/

First Trust Advisors L.P.

Press Inquiries: Ryan Issakainen, 630-765-8689

Broker Inquiries: Sales Team, 866-848-9727

Source: First Trust Advisors L.P.

FAQ

What changes are being made to the First Trust Hedged BuyWrite Income ETF (FTLB) on May 11, 2022?

The ETF will change its name to First Trust Nasdaq BuyWrite Income ETF and its ticker symbol to FTQI, adopting a new investment strategy focused on equity securities and writing Nasdaq-100 call options.

What is the new investment strategy of the First Trust Hedged BuyWrite Income ETF (FTLB)?

The new strategy involves primarily investing in U.S. equity securities and utilizing an option strategy of writing call options on the Nasdaq-100 Index, aiming for increased cash flow.

How will the change in investment strategy affect FTLB's performance?

The shift to writing call options may enhance cash flow but could expose the Fund to higher risks due to the discontinuation of put options for downside protection.

What assets does First Trust Advisors manage as of April 30, 2022?

As of April 30, 2022, First Trust Advisors managed approximately $201 billion in various investment vehicles.