Apple

NVIDIA

Microsoft

Amazon

Tesla

Broadcom

Costco

Netflix

Alphabet

First Trust Exchange-Traded Fund VI First Trust Nasdaq BuyWrite Income ETF

FTQI is an actively-managed portfolio of US stocks, with an options overlay of short calls on the Nasdaq 100.

FTQI employs a buy-write strategy on the NASDAQ-100, aiming for a high yield of 12% through monthly distributions. FTQI's strategy involves selling call options on 100% of its holdings, capping upside potential and making it suitable for income-focused investors. The fund has underperformed the NASDAQ 100 due to its capped gains, delivering 76% ROI over 10 years compared to the index's 436%.

Sacrificing Upside For Income: A Look At FTQI

First Trust Nasdaq BuyWrite Income ETF holds stocks of the Nasdaq Composite, and sells call options on the Nasdaq 100 index for income. FTQI has lagged some competitors on various time frames. The option strategy or distribution policy changed in 2022 to pay a higher yield, making historical data useless to evaluate FTQI.

FTQI: Unconvincing Buy-Write ETF

This article analyzes the First Trust Nasdaq BuyWrite Income ETF and argues that it's not ideal for investors seeking growth from Nasdaq stocks. The fund aims to generate income through a covered-call strategy on the Nasdaq-100 Index, but utilizes in-the-money call options. Growth stocks, however, aim for price appreciation, which these calls restrict since they are ITM options.

FTQI: Poor Structure To Extract Dividends From The Nasdaq, 11% Yield

First Trust Nasdaq BuyWrite Income ETF combines a stock portfolio with an index option overlay to generate additional cash flow. The buy-write strategy offers partial hedging against price declines and improved returns in flat or slightly bullish markets. FTQI's top holdings include Apple, Microsoft, Amazon, Meta Platforms, and Nvidia, with a diverse sector composition.

FTQI: Buy-Writing The Nasdaq

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The Nasdaq-100 Index has been enjoying a huge rally from the start of November and has now hit levels not seen in nearly two years. Investors looking to ride the Nasdaq bulls could consider ETFs.

5 ETF Picks for Booming Nasdaq-100 Surge

First Trust Nasdaq BuyWrite Income ETF is an actively managed fund that holds a portfolio of 157 stocks and writes call options on the Nasdaq 100 index. The FTQI ETF has a 12-month distribution yield of 11.96% and an expense ratio of 0.85%. Compared to its closest competitor, FTQI has lagged behind in performance but has shown improvement in the last 12 months due to a change in strategy.

FTQI: A Change In 2022 Has Put It Closer To Competitors

The FTQI ETF uses a proprietary quantitative method to select U.S. large cap stocks, while adding a call-writing overlay to generate income. Compared to peer funds that employ a buy-write strategy on the Nasdaq 100 Index, the FTQI is the most expensive yet delivers the worst short- and long-term performance. For investors seeking exposure to growth stocks, while generating income from call-writing, I suggest they consider the JEPQ ETF or the QYLG ETF instead.

FTQI: Worst Of Breed Buy-Write ETF On The Nasdaq 100 Index

First Trust Nasdaq BuyWrite Income ETF holds 150 stocks of the Nasdaq Composite and sells calls on the Nasdaq 100 to generate income. The fund has lagged its competitors since inception.

FTQI: 11.8% Yield With A Caveat

First Trust Nasdaq BuyWrite Income ETF writes covered calls on a portfolio that tracks the Nasdaq 100 Index. While there is some risk-management benefit here, there's not nearly enough going for it.

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