FTQI: FIRST TRUST NASDAQ BUYWRITE INCOME ETF
What this ETF is trying to do
The First Trust Nasdaq BuyWrite Income ETF (FTQI) is an exchange-traded fund designed to provide income to investors. While it holds many different stocks, its main goal is to generate cash through its specific investment strategy.
What the numbers show
When looking at an ETF, it is important to understand two different types of returns: price return and total return.
• Price return only tracks how much the share price changes.
• Total return includes both the change in share price AND any cash distributions (dividends) paid out to you.
For FTQI, the one-year price return was 9.00%. However, the one-year total return was much higher at 22.57%. This shows that the extra cash paid to investors added a lot of value.
To see how this works, imagine you invested $10,000 into this ETF roughly one year ago at its estimated price of $19.88. If we only look at the share-price movement (the 9.00% price return), your $10,000 would have grown to approximately $10,900. This amount does not include the extra cash you would have received from distributions.
Income and distribution explanation
FTQI has a high distribution yield of 11.28%. This number describes how much cash the ETF pays out compared to its current price. These payments are usually made monthly. While a high yield can provide a lot of cash, it is important to remember that a high yield does not guarantee that your total investment will grow.
NAV erosion explanation
NAV erosion is a term used when an ETF's underlying value (the Net Asset Value) drops, often because the fund is paying out more cash than it is earning. If an ETF's share price collapses while it pays high distributions, an investor could lose their original principal.
For FTQI, the data shows "no price erosion detected." The erosion-risk score is 100, and there is no severe erosion-risk flag. This means that, based on the current measurements, the fund is not showing signs of its value being eaten away by its payouts.
Top Holdings
The following are some of the top holdings in this ETF (note that this is a partial list and holdings can change):
• Apple Inc: 8.88%
• Dreyfus Govt CM Inst 289: 6.00%
• NVIDIA Corp: 5.85%
• Advanced Micro Devices Inc: 4.32%
• Amazon.com Inc: 4.18%
• Costco Wholesale Corp: 3.20%
• Cisco Systems Inc: 3.13%
• Tesla Inc: 2.90%
• Meta Platforms Inc Class A: 2.88%
• Walmart Inc: 2.87%
Pros
• The ETF has provided positive total returns over the last year and three years.
• It offers a high distribution yield for investors seeking regular cash.
Cons
• The list of holdings is only a partial view of the full portfolio.
• High-yield investments require careful monitoring to ensure the share price stays stable.
Beginner takeaway
When looking at FTQI, remember that the cash you receive (the distribution) and the change in the stock price are two different things. A high yield can be helpful for income, but always look at the total return to see how your investment is actually performing overall.
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | APPLE INC | AAPL | 8.88% |
| 2 | DREYFUS GOVT CM INST 289 | n/a | 6.00% |
| 3 | NVIDIA CORP | NVDA | 5.85% |
| 4 | ADVANCED MICRO DEVICES INC | AMD | 4.32% |
| 5 | AMAZON.COM INC | AMZN | 4.18% |
| 6 | COSTCO WHOLESALE CORP | COST | 3.20% |
| 7 | CISCO SYSTEMS INC | CSCO | 3.13% |
| 8 | TESLA INC | TSLA | 2.90% |
| 9 | META PLATFORMS INC CLASS A | META | 2.88% |
| 10 | WALMART INC | WMT | 2.87% |