The FT Cboe Vest Gold Target Income ETF (BATS:IGLD) is an investment fund that primarily focuses on generating income while managing risk. To achieve this, the fund allocates its assets across a range of low-risk investments, including short-term U.S. Treasury securities, cash, and cash equivalents. These investments are typically considered to be highly liquid and carry low credit risk, providing a stable foundation for the fund's portfolio.
In addition to these traditional investments, the fund also invests in a wholly-owned subsidiary that holds Flexible Exchange Options (FLEX Options). These options are financial instruments that allow the fund to gain exposure to the price performance of an underlying ETF, while also providing a level of protection against potential losses. By using FLEX Options, the fund can potentially generate additional income while managing its risk exposure.
It's worth noting that the FT Cboe Vest Gold Target Income ETF is a non-diversified fund, meaning that it may invest a significant portion of its assets in a single security or a limited number of securities. This can result in higher risk levels compared to diversified funds, which spread their investments across a broader range of assets. However, the fund's investment strategy is designed to balance risk and potential returns, with the goal of generating income for its investors.