First Trust Launches the FT Cboe Vest Gold Strategy Target Income ETF (IGLD)
First Trust Advisors L.P. (“First Trust”) a leading exchange-traded fund (“ETF”) provider and asset manager, announced today that it launched the FT Cboe Vest Gold Strategy Target Income ETF (Cboe: IGLD) (the “fund” or “IGLD”). IGLD is the latest addition to First Trust’s growing suite of Target Outcome ETFs, with over $1.6B in total net assets for the product line as of January 29, 2021.
IGLD seeks to:
- Deliver participation in the price returns of the SPDR Gold Trust (“GLD” or the “underlying ETF”), and
- Produce a consistent level of income that, on an annual basis, exceeds the income generated by an investment in one-month U.S. Treasury securities by approximately 3.85% before fees and expenses.1
IGLD will invest substantially all of its assets in short-term U.S. Treasury securities, cash and cash equivalents and in the shares of a wholly-owned subsidiary that holds FLexible EXchange Options (“FLEX Options”), that reference the price performance of GLD.2 Through its U.S. Treasury holdings and portfolio of options, IGLD seeks to provide returns linked to the performance of GLD. The fund will also seek to generate income through a sale of call options on GLD. Through this call selling strategy, a portion of the upside price return of GLD is converted into current premium income.
IGLD is managed and sub-advised by Cboe Vest Financial LLC (“Cboe Vest”), the creator of Target Outcome Investments and Target Income Strategies.
“Historically, gold has been an important tool for many investment advisors seeking to enhance diversification within their clients’ investment portfolios, while also providing a potential hedge against inflation. We believe this ETF will be useful not only for pursuing those objectives, but also as an income strategy,” said Ryan Issakainen, CFA, Senior Vice President, ETF Strategist at First Trust.
Karan Sood, CEO of Cboe Vest said, “For some investors, the biggest criticism to gold has been the lack of yield. IGLD seeks to change that. We are excited that investors are now able to potentially derive income from gold while still retaining participation in its growth potential.”
Karan Sood and Howard Rubin, of Cboe Vest, will serve as portfolio managers for the fund. The portfolio managers are jointly and primarily responsible for the day-to-day management of the fund.
For more information about First Trust, please contact Ryan Issakainen at (630) 765-8689 or RIssakainen@FTAdvisors.com.