First Trust Introduces FT Vest Silver Strategy & Target Income ETF (SLVY)

WHEATON, Ill.–(BUSINESS WIRE)–First Trust Advisors L.P. (“First Trust”) announced today that it has launched the FT Vest Silver Strategy & Target Income ETF (Cboe BZX: SLVY) (the “fund”). SLVY is an actively managed exchange-traded fund (“ETF”) that seeks to provide investors with current income and capital appreciation. Managed by Vest Financial LLC, the fund combines options contracts referencing the iShares Silver Trust (“SLV”) and short-term U.S. Treasury securities to pursue both goals without directly owning silver.

“Historically, many investors have used silver in an effort to diversify their portfolios and manage inflation risk. We believe SLVY builds on that by offering an income-oriented approach to silver exposure, extending the strategy we’ve applied across our Target Income Strategies^® to this asset class,” said Ryan Issakainen, CFA, Senior Vice President, ETF Strategist at First Trust.

SLVY gains exposure to the price returns of silver by purchasing call options and selling put options referencing SLV. To generate income, the fund also employs a partial covered call strategy – selling at-the-money call options referencing SLV each month, which converts a portion of silver’s potential upside into current income in exchange for capping some participation in silver’s gains.

“SLVY extends Target Income Strategies^® to silver, offering investors a differentiated way to access the metal through a transparent ETF wrapper. We believe the strategy can appeal to investors seeking participation in silver’s potential price returns while pursuing consistent income,” said Jeff Chang, President of Vest Financial LLC, the fund’s sub-advisor.

The options premiums, together with any interest earned on the U.S. Treasuries held by the fund, provide the fund’s income potential. The fund targets an annual income level of approximately 4% (before fees and expenses) above the annual distribution rate of one-month U.S. Treasury securities. However, there is no guarantee that this target will be achieved.

Karan Sood and Trevor Lack, of 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.