First Trust Launches IBLY Targeting Income Above Treasury Yields

First Trust has launched the FT Vest Equity Target Income Plus 0-3 Month Treasury ETF (IBLY) on Cboe BZX, combining short-term Treasury exposure with an equity options income strategy. Sub-advised by Vest Financial, the actively managed ETF uses deep-in-the-money call options on the iShares 0-3 Month Treasury Bond ETF (SGOV) to obtain synthetic Treasury exposure, while selling monthly bullish put spreads linked to the S&P 500 to generate additional income. IBLY targets monthly distributions at an annualized rate 1.5 percentage points above the one-month Treasury yield before fees, or 0.85 percentage points after fees. Its expense ratio is 0.65%. The fund may also hold short-term Treasuries or use box spreads. Unlike conventional Treasury ETFs, IBLY carries equity-market downside risk through its options strategy, and its distribution target is not guaranteed.