Inside First Trust ETFs: Monetizing Risk with Call-Writing ETFs
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Call-writing ETFs have been one of the fastest growing segments of the ETF industry in recent years, as investment professionals have sought to capitalize on the larger options’ premiums that generally correspond with increased equity volatility. Over the past two years, assets in call-writing ETFs, also known as “covered call” or “buy-write” ETFs, have grown by over 500%, and net inflows this year have totaled $17.4 billion (as of 7/31/23). These ETFs typically invest in equities, while also selling call options to generate additional income. Below, we identify a few key attributes of call-writing ETFs for investment professionals to consider when sorting through this rapidly growing segment of the ETF industry. We then highlight four First Trust call-writing ETFs.

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Posted on Monday, August 28, 2023 @ 9:20 AM

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.