CBOE Vest S&P 500 Price, Forecast, Insider, Ratings, Fundamentals & Signals

Wheaton, ill.--(business wire)--first trust advisors l.p. (“first trust” or “fta”) a leading exchange-traded fund (“etf”) provider and asset manager, announced today that the reorganization of cboe vest s&p 500® dividend aristocrats target income etf® (the “target fund”), an index based exchange-traded fund (“etf”), managed by cboe vest financial llc, into ft cboe vest s&p 500® dividend aristocrats target income etf® (the “acquiring fund” or “kng”), an index based etf managed by fta, wa

FT Cboe Vest S&P 500® Dividend Aristocrats Target Income ETF uses a buy-write strategy with dividend aristocrats to generate income and yield. The KNG ETF has a diversified portfolio of 67 stock holdings and 66 positions in options, with a concentration in Consumer Staples and Industrials sectors. KNG has outperformed other S&P 500 buy-write ETFs since 2018, offering high dividend yield and potential for capital appreciation. However, its distributions may be variable and expense ratio is high.

Covered call ETFs have attracted over $25 billion in net flows this year, surpassing the total for 2022. The FT Cboe Vest S&P 500 Dividend Aristocrats Target Income ETF is a veteran ETF in the covered call space. KNG has a hold rating due to its construct, weak relative returns, and significant sector and style wager compared to the broad stock market.

First Trust Cboe Vest S&P 500 Dividend Aristocrats Target Income ETF implements a buy-write strategy with dividend aristocrats. It is well-diversified across sectors and holdings. KNG outperforms other S&P 500 buy-write ETFs since 2018, but lags behind JEPI and FTHI in the last 3 years.

KNG: Not The Buy/Write ETF King

KNG invests in dividend aristocrats and sells covered calls on them. About 47% of asset value is in two sectors: consumer staples and industrials.

Once upon a time, dividends played a starring role in equity markets—until 14 years of easy money whetted investors' appetite for risk and created a massive tailwind for unprofitable, long-duration growth stocks. Valuations appear to be attractive: Stocks yielding north of 2.5% are trading near their largest discount to the equity market in recent memory.

The S&P 500 Index has rebounded sharply off its previous low in October, closing up 14% on Feb. 17 since October's trough. The market could continue to rally, of course.

The KNG ETF holds a portfolio of dividend aristocrats and sells covered calls. Consumer staples and industrials are the top sectors, weighing over 40% together.

KNG is a hybrid income ETF holding dividend aristocrats and selling call options on them. Its heaviest sectors are consumer staples and industrials.

KNG uses a small covered call strategy on the S&P 500 dividend aristocrats to produce a higher yield.