FT Vest’s KNG ETF lags ProShares’ NOBL by 1.75 percent annualized despite an 8.6 percent yield from selling covered calls on Dividend Aristocrats.
The FT Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG) delivers an 8.6 percent yield by selling monthly covered calls on 69 Dividend Aristocrats, including Johnson & Johnson and Procter & Gamble. Over eight years, KNG returned 93 percent, trailing ProShares S&P 500 Dividend Aristocrats ETF (NOBL) by 1.75 percent annualized.
NOBL charges 0.35 percent in expenses versus KNG’s 0.74 percent. Competitors like Amplify CWP Enhanced Dividend Income ETF, which selectively writes calls, returned 66 percent over five years. Selling calls on high-performing stocks like JNJ, up 55 percent in the past year, limits upside potential.
The strategy converts capital appreciation into income, appealing to investors seeking monthly distributions but capping long-term growth.