Examining the Covered-Call Approach of First Trust BuyWrite Income ETF

The First Trust BuyWrite Income ETF (FTHI) employs a dual strategy, investing in a portfolio of US equities while simultaneously executing a covered-call options strategy on the S&P 500 Index. This $1.56 billion fund, which carries an expense ratio of 0.76%, aims to generate consistent monthly income for shareholders through the collection of options premiums.

While the ETF holds 211 individual stocks, its portfolio demonstrates a significant concentration in its largest positions. The top five holdings are:
* Microsoft Corp. (6.82%)
* NVIDIA Corp. (6.63%)
* Apple Inc. (6.12%)
* Amazon.com Inc. (3.56%)
* Meta Platforms Inc. (3.12%)

In total, the ten largest positions account for 37.53% of the fund’s assets. Recent performance among these... Read more...