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FT Vest S&P 500® Dividend Aristocrats Target Income ETF® (KNG)
Investment Objective/Strategy - The FT Vest S&P 500® Dividend Aristocrats Target Income ETF® (the "Fund") seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of an equity index called the Cboe S&P 500® Dividend Aristocrats Target Income Index Monthly Series (the "Index"). The Fund will normally invest at least 80% of its total assets (including investment borrowings) in the common stocks and call options that comprise the Index. The Fund, using an indexing investment approach, attempts to replicate, before fees and expenses, the performance of the Index. The Index is owned, developed, maintained and calculated by S&P Opco, LLC (the "Index Provider"). Vest Financial LLC is the Fund's investment sub-advisor ("Vest" or the "Sub-Advisor").
There can be no assurance that the Fund's investment objectives will be achieved.
Index Description According to the Index Provider
  • The index is a rules-based buy-write index designed with the primary goal of generating an annualized level of income from stock dividends and option premiums that is approximately 8% over the annual dividend yield of the S&P 500® Index and a secondary goal of generating limited capital appreciation based on the returns of the equity components of the index.
  • The index is composed of two parts:
    • An equal-weighted portfolio of the stocks contained in the S&P 500® Dividend Aristocrats Index (the "Aristocrat Stocks") that have options that trade on a national securities exchange.
    • A rolling series of short (written) call options on each of the Aristocrat Stocks (the "Covered Calls").
  • The S&P 500 Dividend Aristocrats Index generally includes companies in the S&P 500 Index that have increased dividend payments each year for at least 25 consecutive years and meet certain market capitalization and liquidity requirements.
  • The Covered Calls are written (sold) by the index on the third Friday of each month with an expiration typically on the third Friday of the following month and a strike price as close as possible to the closing price of the underlying Aristocrat Stock at the time the Covered Call is written.
  • The index employs a "partial covered call strategy," meaning that Covered Calls will be typically written on a notional value less than the total value of each underlying Aristocrat Stock, such that the short position in each call option is "covered" by a portion of the corresponding Aristocrat Stock held by the index.
  • The equity portion of the Index is rebalanced quarterly and reconstituted annually.
Fund Overview
Fund TypeTarget Income Strategies®
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon Corp
Portfolio Manager/Sub-AdvisorVest Financial, LLC
Fiscal Year-End10/31
ExchangeCboe BZX
Inception Price$40.00
Inception NAV$40.00
Expense Ratio*0.75%
* As of 3/1/2024
On March 1, 2021, the Cboe Vest S&P 500® Dividend Aristocrats Target Income ETF (the "Target Fund") was reorganized into the FT Vest S&P 500® Dividend Aristocrats Target Income ETF (the “Acquiring Fund”). Pursuant to the reorganization, the assets of the Target Fund were transferred to, and the liabilities of the Target Fund were assumed by, the Acquiring Fund. The Target Fund was incepted on March 26, 2018. The Acquiring Fund was incepted on February 24, 2021.
Current Fund Data (as of 6/14/2024)
Closing NAV1$50.64
Closing Market Price2$50.69
Bid/Ask Midpoint$50.67
Bid/Ask Premium0.06%
30-Day Median Bid/Ask Spread30.06%
Total Net Assets$2,781,440,930
Outstanding Shares54,925,000
Daily Volume289,650
Average 30-Day Daily Volume321,492
Closing Market Price 52-Week High/Low$54.37 / $46.64
Closing NAV 52-Week High/Low$54.33 / $46.62
Number of Holdings (excluding cash)132
Top Holdings (as of 6/14/2024)*
Holding Percent
C.H. Robinson Worldwide, Inc. 1.83%
Air Products and Chemicals, Inc. 1.79%
Essex Property Trust, Inc. 1.78%
Walmart Inc. 1.75%
Amcor Plc 1.73%
NextEra Energy, Inc. 1.70%
Brown & Brown, Inc. 1.67%
Expeditors International of Washington, Inc. 1.67%
Ecolab Inc. 1.66%
Chubb Limited 1.64%

* Excluding cash.  Holdings are subject to change.

NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend per Share Amt (as of 6/17/2024)4$0.3829
30-Day SEC Yield (as of 5/31/2024)51.76%
12-Month Distribution Rate (as of 5/31/2024)68.61%
Distribution Rate (as of 5/31/2024)78.92%
Fund Characteristics (as of 5/31/2024)8
Maximum Market Cap.$530,012
Median Market Cap.$45,215
Minimum Market Cap.$8,374
Price/Cash Flow15.02
Market cap and price ratio statistics are for the equity portion of the fund and exclude cash and options.
Portfolio Options Information (as of 4/30/2024)
Option Overwrite %25.30%
Current Month Upside Participation %74.70%
ATM Short Call Maturity6/21/24
Option Overwrite % is the percentage of the net asset value used for writing of call options against a long position at each monthly call selling date. Current Month Upside Participation % is the percentage of participation in the price returns of the underlying instrument at each monthly call selling date. ATM (At the Money) Short Call Maturity is when an options price is identical to the current price of the underlying security. The ATM short call produces premium income for the fund which expires on the maturity date.
Bid/Ask Premium/Discount (as of 6/14/2024)
  2023 Q1 2024 Q2 2024 Q3 2024
Days Traded at Premium 225 53 48 ---
Days Traded at Discount 25 8 6 ---
Top Sector Exposure (as of 6/14/2024)
Consumer Staples 23.89%
Industrials 22.60%
Materials 12.47%
Financials 10.94%
Health Care 10.49%
Real Estate 4.84%
Utilities 4.74%
Consumer Discretionary 4.20%
Information Technology 2.98%
Energy 2.85%
Hypothetical Growth of $10,000 Since Inception (as of 6/14/2024) *
Tracking Index: Cboe S&P 500® Dividend Aristocrats Target Income Index Monthly Series

Month End Performance (as of 5/31/2024)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Net Asset Value (NAV) 1.40% 3.43% 13.54% 3.70% 10.10% N/A 9.20%
After Tax Held 0.50% 1.91% 9.91% 1.50% 8.15% N/A 7.39%
After Tax Sold 0.83% 2.02% 8.19% 1.91% 7.17% N/A 6.55%
Market Price 1.36% 3.39% 13.49% 3.63% 10.09% N/A 9.20%
Index Performance **
Cboe S&P 500® Dividend Aristocrats Target Income Index Monthly Series 1.50% 3.67% 14.32% 4.44% 10.91% N/A 10.01%
S&P 500® Dividend Aristocrats Index 1.32% 3.62% 14.77% 4.56% 11.29% N/A 10.43%
S&P 500® Index 3.91% 11.30% 28.19% 9.57% 15.80% N/A 13.67%
Quarter End Performance (as of 3/28/2024)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund Performance *
Net Asset Value (NAV) 6.24% 6.24% 12.22% 6.94% 9.80% N/A 9.96%
After Tax Held 5.31% 5.31% 9.28% 4.88% 7.99% N/A 8.19%
After Tax Sold 3.67% 3.67% 7.36% 4.45% 6.96% N/A 7.16%
Market Price 6.21% 6.21% 12.15% 6.90% 9.79% N/A 9.96%
Index Performance **
Cboe S&P 500® Dividend Aristocrats Target Income Index Monthly Series 6.40% 6.40% 12.99% 7.70% 10.62% N/A 10.78%
S&P 500® Dividend Aristocrats Index 7.09% 7.09% 14.07% 8.14% 11.15% N/A 11.34%
S&P 500® Index 10.56% 10.56% 29.88% 11.49% 15.05% N/A 13.95%
3-Year Statistics (as of 5/31/2024)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
KNG 16.23% -4.46 0.83 0.13 0.91
S&P 500® Dividend Aristocrats Index 16.97% -3.81 0.87 0.18 0.91
S&P 500® Index 17.81% --- 1.00 0.44 1.00
Standard Deviation is a measure of price variability (risk). Alpha is an indication of how much an investment outperforms or underperforms on a risk-adjusted basis relative to its benchmark.Beta is a measure of price variability relative to the market. Sharpe Ratio is a measure of excess reward per unit of volatility. Correlation is a measure of the similarity of performance.

*Performance data quoted represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate and shares when sold or redeemed, may be worth more or less than their original cost.

After Tax Held returns represent return after taxes on distributions. Assumes shares have not been sold. After Tax Sold returns represent the return after taxes on distributions and the sale of fund shares. Returns do not represent the returns you would receive if you traded shares at other times. Market Price returns are determined by using the midpoint of the national best bid offer price ("NBBO") as of the time that the fund's NAV is calculated. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.

**Performance information for each listed index is for illustrative purposes only and does not represent actual fund performance. Indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown. Indexes are unmanaged and an investor cannot invest directly in an index.

S&P 500® Dividend Aristocrats Index - The Index consists of companies from the S&P 500 Index that have increased dividends every year for at least 25 consecutive years.

S&P 500® Index - The Index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance.

A written (sold) call option gives the seller the obligation to sell shares of the underlying asset at a specified price (strike price) at a specified date (expiration date). The writer (seller) of the call option receives an amount (premium) for selling the option. In the event the underlying asset appreciates above the strike price as of the expiration date, the seller of the call option will have to pay the difference between the value of the underlying asset and the strike price (which loss is offset by the premium initially received), and in the event the underlying asset declines in value, the call option may end up worthless and the seller of the call option retains the premium.
1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's outstanding shares.
2 Fund shares are purchased and sold on an exchange at their market price rather than net asset value (NAV), which may cause the shares to trade at a price greater than NAV (premium) or less than NAV (discount).
3 The median bid-ask spread is calculated by identifying the national best bid and national best offer ("NBBO") for the fund as of the end of each 10 second interval during each trading day of the last 30 calendar days and dividing the difference between each such bid and offer by the midpoint of the NBBO. The median of those values is identified and that value is expressed as a percentage rounded to the nearest hundredth.
4 Most recent distribution paid or declared to today's date. Subject to change in the future. There is no guarantee that the fund will declare dividends.
5 The 30-day SEC yield is calculated by dividing the net investment income per share earned during the most recent 30-day period by the maximum offering price per share on the last day of the period and includes the effects of fee waivers and expense reimbursements, if applicable.
6 12-Month Distribution Rate is calculated by dividing the sum of the fund's trailing 12-month ordinary distributions paid or declared by the NAV price. Distribution rates may vary.
7 Distribution Rate is calculated by dividing the fund's most recent ordinary distribution paid or declared, on an annualized basis, by the NAV price. Distribution rates may vary.
8 All market capitalization numbers are in USD$ Millions.
9 Inception Date is 3/26/2018

You should consider the fund's investment objectives, risks, and charges and expenses carefully before investing. You can download a prospectus or summary prospectus, or contact First Trust Portfolios L.P. at 1-800-621-1675 to request a prospectus or summary prospectus which contains this and other information about the fund. The prospectus or summary prospectus should be read carefully before investing.

Risk Considerations

You could lose money by investing in a fund. An investment in a fund is not a deposit of a bank and is not insured or guaranteed. There can be no assurance that a fund's objective(s) will be achieved. Investors buying or selling shares on the secondary market may incur customary brokerage commissions. Please refer to each fund's prospectus and Statement of Additional Information for additional details on a fund's risks. The order of the below risk factors does not indicate the significance of any particular risk factor.

Unlike mutual funds, shares of the fund may only be redeemed directly from a fund by authorized participants in very large creation/redemption units. If a fund's authorized participants are unable to proceed with creation/redemption orders and no other authorized participant is able to step forward to create or redeem, fund shares may trade at a premium or discount to a fund's net asset value and possibly face delisting and the bid/ask spread may widen.

Consumer staples companies provide products that are typically considered non-discretionary items based on consumer purchasing habits and their success is affected by a variety of factors, including government regulations, which may affect the permissibility of using various product components and production methods, new laws, regulations or litigation, marketing campaigns, competitive pricing, materials costs and consumer confidence.

A fund may be subject to the risk that a counterparty will not fulfill its obligations which may result in significant financial loss to a fund.

The writer of a covered call option foregoes any profit from increases in the market value of the underlying security covering the call option above the sum of the premium and the strike price of the call, but retains the risk of loss if the underlying security declines in value. The Fund will have no control over the exercise of the option by the option holder and may lose the benefit from any capital appreciation on the underlying security.

Current market conditions risk is the risk that a particular investment, or shares of the fund in general, may fall in value due to current market conditions. As a means to fight inflation, the Federal Reserve and certain foreign central banks have raised interest rates and expect to continue to do so, and the Federal Reserve has announced that it intends to reverse previously implemented quantitative easing. Recent and potential future bank failures could result in disruption to the broader banking industry or markets generally and reduce confidence in financial institutions and the economy as a whole, which may also heighten market volatility and reduce liquidity. Ongoing armed conflicts between Russia and Ukraine in Europe and among Israel, Hamas and other militant groups in the Middle East, have caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, the Middle East and the United States. The hostilities and sanctions resulting from those hostilities have and could continue to have a significant impact on certain fund investments as well as fund performance and liquidity. The COVID-19 global pandemic, or any future public health crisis, and the ensuing policies enacted by governments and central banks have caused and may continue to cause significant volatility and uncertainty in global financial markets, negatively impacting global growth prospects.

A fund is susceptible to operational risks through breaches in cyber security. Such events could cause a fund to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss.

The use of derivatives instruments involves different and possibly greater risks than investing directly in securities including counterparty risk, valuation risk, volatility risk, and liquidity risk. Further, losses because of adverse movements in the price or value of the underlying asset, index or rate may be magnified by certain features of the derivatives.

A fund normally pays its income as distributions and therefore, a fund may be required to reduce its distributions if it has insufficient income. Additionally at times, a fund may need to sell securities when it would not otherwise do so and could cause distributions from that sale to constitute return of capital. Because of this, a fund may not be an appropriate investment for investors who do not want their principal investment in a fund to decrease over time or who do not wish to receive return of capital in a given period.

Companies that issue dividend-paying securities are not required to continue to pay dividends on such securities. Therefore, there is a possibility that such companies could reduce or eliminate the payment of dividends in the future.

Equity securities may decline significantly in price over short or extended periods of time, and such declines may occur in the equity market as a whole, or they may occur in only a particular country, company, industry or sector of the market.

An index fund will be concentrated in an industry or a group of industries to the extent that the index is so concentrated. A fund with significant exposure to a single asset class, or the securities of issuers within the same country, state, region, industry, or sector may have its value more affected by an adverse economic, business or political development than a broadly diversified fund.

A fund may be a constituent of one or more indices or models which could greatly affect a fund's trading activity, size and volatility.

There is no assurance that the index provider or its agents will compile or maintain the index accurately. Losses or costs associated with any index provider errors generally will be borne by a fund and its shareholders.

Industrials and producer durables companies are subject to certain risks, including the general state of the economy, intense competition, consolidation, domestic and international politics, excess capacity and consumer demand and spending trends. They may also be significantly affected by overall capital spending levels, economic cycles, technical obsolescence, delays in modernization, labor relations, and government regulations.

As inflation increases, the present value of a fund's assets and distributions may decline.

Large capitalization companies may grow at a slower rate than the overall market.

Leverage may result in losses that exceed the amount originally invested and may accelerate the rates of losses. Leverage tends to magnify, sometimes significantly, the effect of any increase or decrease in a fund's exposure to an asset or class of assets and may cause the value of a fund's shares to be volatile and sensitive to market swings.

Certain fund investments may be subject to restrictions on resale, trade over-the-counter or in limited volume, or lack an active trading market. Illiquid securities may trade at a discount and may be subject to wide fluctuations in market value.

Market risk is the risk that a particular security, or shares of a fund in general may fall in value. Securities are subject to market fluctuations caused by such factors as general economic conditions, political events, regulatory or market developments, changes in interest rates and perceived trends in securities prices. Shares of a fund could decline in value or underperform other investments as a result. In addition, local, regional or global events such as war, acts of terrorism, spread of infectious disease or other public health issues, recessions, natural disasters or other events could have significant negative impact on a fund.

A fund faces numerous market trading risks, including the potential lack of an active market for fund shares due to a limited number of market makers. Decisions by market makers or authorized participants to reduce their role or step away in times of market stress could inhibit the effectiveness of the arbitrage process in maintaining the relationship between the underlying values of a fund's portfolio securities and a fund's market price.

An index fund's return may not match the return of the index for a number of reasons including operating expenses, costs of buying and selling securities to reflect changes in the index, and the fact that a fund's portfolio holdings may not exactly replicate the index.

A fund and a fund's advisor may seek to reduce various operational risks through controls and procedures, but it is not possible to completely protect against such risks. The fund also relies on third parties for a range of services, including custody, and any delay or failure related to those services may affect the fund's ability to meet its objective.

The prices of options are volatile and the effective use of options depends on a fund's ability to terminate option positions at times deemed desirable to do so. There is no assurance that a fund will be able to effect closing transactions at any particular time or at an acceptable price.

A fund that invests in securities included in or representative of an index will hold those securities regardless of investment merit and the fund generally will not take defensive positions in declining markets.

High portfolio turnover may result in higher levels of transaction costs and may generate greater tax liabilities for shareholders.

The market price of a fund's shares will generally fluctuate in accordance with changes in the fund's net asset value ("NAV") as well as the relative supply of and demand for shares on the exchange, and a fund's investment advisor cannot predict whether shares will trade below, at or above their NAV.

Trading on an exchange may be halted due to market conditions or other reasons. There can be no assurance that a fund's requirements to maintain the exchange listing will continue to be met or be unchanged.

A fund may hold securities or other assets that may be valued on the basis of factors other than market quotations. This may occur because the asset or security does not trade on a centralized exchange, or in times of market turmoil or reduced liquidity. Portfolio holdings that are valued using techniques other than market quotations, including "fair valued" assets or securities, may be subject to greater fluctuation in their valuations from one day to the next than if market quotations were used. There is no assurance that a fund could sell or close out a portfolio position for the value established for it at any time.

A fund may invest in securities that exhibit more volatility than the market as a whole.

First Trust Advisors L.P. (FTA) is the adviser to the First Trust fund(s). FTA is an affiliate of First Trust Portfolios L.P., the distributor of the fund(s).

The Target Outcome registered trademarks are registered trademarks of Vest Financial LLC.

S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("S&P"), a division of S&P Global; Cboe® is a registered trademark of Cboe. The Index, S&P, and Cboe trademarks have been licensed for use by the Sub-Advisor, and in turn, sub-licensed by the Advisor, including for use by the fund. The fund is not sponsored, endorsed, sold, or promoted by Cboe and/or its affiliates (the "Cboe Group"), or S&P and/or its affiliates (together, the "S&P Group"). Neither the Cboe Group nor the S&P Group make any representation regarding the advisability of investing in the fund and shall have no liability whatsoever in connection with the fund.

CUSIP identifiers have been provided by CUSIP Global Services, managed on behalf of the American Bankers Association by FactSet Research Systems Inc. and are not for use or dissemination in a manner that would serve as a substitute for any CUSIP service. The CUSIP Database, ©2024 CUSIP Global Services. "CUSIP" is a registered trademark of the American Bankers Association.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
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