The fund holds an equity portfolio that tracks the Nasdaq 100 Index and runs a covered call strategy on that index to earn additional income. The structure is designed to deliver relatively strong performance in sideways or gently declining markets.

It suits investors who want to keep exposure to the growth stock sector while also receiving regular, high monthly dividend income.

It is an actively managed ETF launched by First Trust in 2014.

The fund buys Nasdaq 100 stocks directly while simultaneously selling index call options to collect premiums. It also actively manages the share of options sold, flexibly adjusting it to balance income generation against participation in price gains.

• A buy-write strategy with a long track record
• Income secured by selling index call options

Assets under management (AUM) stand at $1.0B, and the expense ratio is 0.75% per year.

Because the option exposure is actively managed, the fund responds better to market conditions than simple index-tracking covered call products, but its management fee is somewhat higher than that of index-based funds.

In a strong tech sector rally, the fund must give up part of the index's upside. In volatile markets, however, the option premiums act as a buffer that cushions declines in returns.

In an environment of heavy interest rate volatility, capital seeking stable monthly distributions has been flowing in steadily, and there is consistent investor demand for capturing tech sector growth and income at the same time.

The fund pursues the performance of Nasdaq growth stocks and high option premium income at once, but it has the limitation that gains are capped in sharp rallies.

JEPQ and QYLD, shown in the table, also use a Nasdaq 100-based covered call strategy, but they differ in how they sell options and in how much they sell. JEPI, meanwhile, is based on the S&P 500 and has relatively lower volatility. If you want to focus purely on tech growth, QQQ or QQQM, which have no option strategy, may be a better choice.

FTQI is a carefully designed hybrid product that targets income and growth at the same time. Before making an actual investment decision, be sure to review the following key checklist thoroughly.

You should fully understand the high volatility of the tech sector and the return structure of the covered call strategy. In particular, the main risk is that the fund may lag in a sharp rally.

For investors who need regular monthly cash flow but also want to participate to some extent in the long-term growth of the Nasdaq 100 Index, it can be a suitable alternative worth considering.