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As investors process shifting trade policies, inflation and geopolitical tensions, First Trust Advisors launches three new Target Income ETFs aimed at boosting income potential while maintaining fixed-income exposure. These actively managed funds each carry a net expense ratio of 0.65% and utilize option strategies to strengthen returns.
Also See: 3 Dividend ETFs to Maximize Passive Income
The three newly launched funds, FT Vest Investment Grade & Target Income ETF (NYSE:LQTI), FT Vest High Yield & Target Income ETF (NYSE:HYTI), and FT Vest 20+ Year Treasury & Target Income ETF (NYSE:LTTI), offer a combination of U.S. Treasury securities with options-driven exposure to specific fixed-income sectors.
LQTI provides investment-grade corporate bond exposure through its underlying ETF, the iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSE:LQD). HYTI targets high-yield corporate bonds via the iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:HYG). LTTI focuses on long-term U.S. Treasury exposure, tied to the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT).
Each fund utilizes FLEX options, which are customizable exchange-traded options designed to optimize risk and return. This is in effort to distribute income at an annual rate 5% higher than their underlying ETFs.
With over 160 ETFs listed in the U.S., First Trust continues to expand its roots in the income-focused investing space. One of its flagship funds, the First Trust Preferred Securities & Income ETF (NYSE:FPE), has more than $5 billion in assets under management.
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