(RDVI) FT Cboe Vest Rising - Ratings and Ratios

The FT Cboe Vest Rising Dividend Achievers Target Income ETF (RDVI) is designed for investors seeking consistent income through a combination of dividends and options strategies. The fund primarily invests in dividend-paying securities, focusing on companies with a history of increasing dividends, as tracked by the NYSE Dividend Achievers 50 Index. By employing a collar strategy—selling call options and buying put options on these securities—RDVI aims to enhance income through option premiums while mitigating potential declines.

RDVI targets an annual distribution rate of approximately 8%, exceeding the S&P 500s dividend yield, making it attractive in low-interest-rate environments. Its non-diversified status allows concentration on high-yield opportunities, though this may increase risk. With significant assets under management, the fund offers liquidity, a crucial factor for income-focused investors seeking regular cash flow.

This ETF is particularly suited for those prioritizing income over capital appreciation. Investors should be aware of the potential trade-offs, including limited upside participation in rising markets due to the options strategy. Nonetheless, RDVIs approach aligns well with strategies seeking predictable returns, supported by a portfolio of established dividend-paying companies.