At a glance
FTKI charges 0.86% a year, above the 0.16% average of the 6 funds most like it (the most expensive of 7). It has $24.0M in assets, the 7th largest of that group; it paid 5.03% of its price in distributions over the past 12 months, monthly. Its ten largest positions make up 21.8% of the fund, out of 144 in all.
The short version
First Trust Small Cap BuyWrite Income ETF (FTKI) is an actively managed fund that owns U.S.-listed small-company stocks and writes call options on the Russell 2000 Index or small-cap ETFs, trading away some future gains for cash it pays out monthly. Its trailing 12-month yield was 5.03% as of October 27, 2026. The catch: its 0.86% annual expense ratio is far above the 0.16% average of six plain small-cap stock funds.
Price history
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FTKI — over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| FTKI price data to Oct 27, 2026 | +4.7% | — | — | — | — | — |
- The deepest fall in its price history was 5.3% (Aug 27, 2026 to Sep 30, 2026), not yet recovered.
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Before this security existed |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Before this security existed |
Dividends and income
No distribution history is available for this fund.
Distributions through Oct 27, 2026.What's inside
As of Jun 30, 2026, the fund held 144 securities; the ten largest made up 21.82% of assets.
| Holding | Weight | |
|---|---|---|
| ARGAN INC | 4.23% | |
| MASTEC INC | 2.39% | |
| CREDO TECHNOLOGY GROUP HOLDING LTD | 2.23% | |
| AMKOR TECHNOLOGY INC | 1.95% | |
| SEZZLE INC | 1.94% | |
| ETSY INC | 1.91% | |
| UIPATH INC | 1.91% | |
| MONARCH CASINO & RESORT INC | 1.81% | |
| MAPLEBEAR INC | 1.80% | |
| ABERCROMBIE & FITCH COMPANY | 1.65% | |
| CREDICORP LTD | 1.64% | |
| FIRSTCASH HOLDINGS INC | 1.64% | |
| CLEAR SECURE INC | 1.57% | |
| TEXAS ROADHOUSE INC | 1.56% | |
| SCORPIO TANKERS INC | 1.46% |
By country
United States 76.4%Bermuda 4.78%Canada 4.16%Cayman Islands 3.7%Marshall Islands 3.15%By asset type
Stocks 99.73%What changed recently
- Over the three months to Jun 30, 2026, investors added a net $983K (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +2.44%, +0.42%, +3.19%.
How it works
FTKI doesn't track an index. First Trust's managers pick U.S.-listed small-cap stocks (shares of smaller companies). They judge each one on trading liquidity, company size, share price, sector and contribution to risk and return. The aim is returns reasonably correlated with the Russell 2000 Index over a full market cycle. Turnover was 114%, per the April 30, 2026 prospectus, meaning a year's trading exceeded the portfolio's value. As of June 30, 2026, it held 144 stocks, led by Argan (4.2%), MasTec (2.4%) and Credo Technology (2.2%).
It also writes call options. That means taking cash up front, called a premium, in exchange for giving up gains above a set “strike” price until the option expires. FTKI writes calls on the Russell 2000 Index or small-cap ETFs (as of June 30, 2026, all were on the iShares Russell 2000 ETF). The calls cover 50% to 100% of assets, last under a year and are set at or above the market price. It may also purchase higher-strike calls to keep some upside.
Because FTKI doesn't own the index or ETF behind those calls, the prospectus labels them “uncovered.” Its stocks act as a hedge but won't match the index exactly. So if the Russell 2000 surges while its picks lag, option losses can outrun stock gains. Monthly payouts have no target level and may exceed the fund's income and gains.
What it really costs
- FTKI charges 0.86% a year, versus an average of 0.16% for the similar funds below (7th of 7, cheapest first).
- Of that, 0.85% is the management fee; the rest covers other fund expenses.
Structure and tax notes
- Generates much of its income from selling options (directly or through notes). That income is usually taxed as ordinary income rather than as qualified dividends, and the strategy gives up some upside in strong markets.
In a retirement portfolio
Its primary objective is income, paid monthly mainly from option premiums, though its small-cap stocks can still fall sharply.
FTKI could add monthly income to a portfolio's stock side: its trailing 12-month yield was 5.03% as of October 27, 2026. Most of it comes from option premiums, usually taxed as ordinary income rather than lower-taxed qualified dividends, and payouts may exceed the fund's income and gains. Its 0.86% expense ratio compares with a 0.16% average for six plain small-cap stock funds.
Launched February 26, 2025, FTKI missed the 2008, 2020 and 2022 downturns, and its prospectus shows no full-year return. Its deepest drop between June 9 and October 27, 2026 was 5.3%, from August 27 to September 30, and it had not recovered by October 27. Small caps can fall hard, and premiums cushion only part of a drop, so someone drawing income may cash out shares at low prices. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors seeking monthly income from small-company stocks, with a trailing 12-month yield of 5.03% as of October 27, 2026.
- Investors willing to give up part of any small-cap rally for option premiums that soften, but don't prevent, losses.
- Investors comfortable with active stock picking, 114% turnover and a portfolio led by Argan, MasTec and Credo Technology as of June 30, 2026.
Look elsewhere if
- Cost-focused investors: the 0.86% expense ratio is many times the 0.03% of SPSM or 0.06% of IJR, both plain small-cap index funds.
- Those wary of small funds or short records: launched February 2025, it held about $24 million in net assets as of June 30, 2026.
- Investors who want full small-cap upside or qualified-dividend tax treatment, since written calls cap gains and option income is usually taxed as ordinary income.
Close alternatives
Matched by closest holdings overlap from the latest N-PORT reports (no similar fund shares 20% or more of its holdings).
| Fund | Overlap | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| FTKI this fund | — | 0.86% | $24.0M | — | — |
| AVUV Avantis U.S. Small Cap Value ETF · different strategy | 11% | 0.25% | $31.17B | +28.4% | +19.2% |
| SPSM SPDR Portfolio S&P 600 Small Cap ETF · different strategy | 10% | 0.03% | $16.92B | +21.7% | +17.4% |
| IJR iShares Core S&P Small-Cap ETF · different strategy | 10% | 0.06% | $111.32B | +21.7% | +17.4% |
| FNDA Schwab Fundamental U.S. Small Company ETF · different strategy | 9% | 0.25% | $9.10B | +15.4% | +18.5% |
| VBK Vanguard Small Cap Growth ETF · different strategy | 8% | 0.07% | $47.02B | +10.3% | +19.4% |
| DFAS Dimensional U.S. Small Cap ETF · different strategy | 7% | 0.27% | $15.31B | +19.4% | +17.5% |
Questions investors ask
Does FTKI pay monthly dividends?
Yes. FTKI pays distributions monthly. As of October 27, 2026, its trailing 12-month yield was 5.03%, based on $0.98 per share in payouts. Most of that income comes from premiums the fund collects by writing call options, with dividends from its stocks adding some. The fund doesn't target a set income level, so payments can vary. The prospectus also warns that distributions may exceed its income and gains or may need to be reduced.
Is FTKI a covered call ETF?
Not technically, though it works much like one. A covered call usually means writing options on shares the investor already owns. FTKI owns small-cap stocks but writes calls on the Russell 2000 Index or small-cap ETFs; as of June 30, 2026, all were on the iShares Russell 2000 ETF. Because it doesn't own what the options reference, the prospectus calls them “uncovered.” Its stocks act as the hedge, but if they lag the index in a rally, option losses may not be fully offset.
What are FTKI's top holdings?
As of June 30, 2026, FTKI's largest holdings were Argan (4.2%), MasTec (2.4%), Credo Technology (2.2%), Amkor Technology (1.9%) and Sezzle (1.9%), followed by Etsy, UiPath, Monarch Casino & Resort, Maplebear and Abercrombie & Fitch. The top 10 made up about 22% of assets, out of 144 stocks in total. Roughly 76% was in U.S. companies; the rest were U.S.-listed firms based in places such as Bermuda, Canada, the Cayman Islands and the Marshall Islands.
FTKI vs IJR: what's the difference?
They follow different strategies, and their holdings overlap only about 10%. IJR, the iShares Core S&P Small-Cap ETF, is a plain small-cap index fund charging 0.06% a year, with about $111 billion in net assets as of June 30, 2026. FTKI is actively managed, charges 0.86% and held about $24 million on the same date. It writes call options for monthly income, which caps part of its gains in strong rallies. IJR keeps the full upside of its index; FTKI trades some of it for income.
Is FTKI good for retirement income?
It can add monthly income, but it is a small-company stock fund, not a bond substitute. FTKI's trailing 12-month yield was 5.03% as of October 27, 2026. Its shares can still fall sharply in a downturn, and option premiums cushion only part of a drop. Launched in February 2025, it has no record from the 2008, 2020 or 2022 downturns. Its 0.86% expense ratio tops the 0.16% average of six plain small-cap funds, and option income is usually taxed as ordinary income.