KNG’s 8.6 Percent Yield Comes From Selling Calls on Dividend Aristocrats, And It Has Lagged NOBL Since 2018

2 hours ago 2

Omor Ibne Ehsan

Mon, May 25, 2026 astatine 7:15 AM CDT 4 min read

Quick Read

FT Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG) holds 69 Dividend Aristocrats including Johnson & Johnson (JNJ) and Procter & Gamble (PG), selling covered calls monthly to make an 8.6% yield, but returned 93% implicit 8 years versus 107% for ProShares S&P 500 Dividend Aristocrats ETF (NOBL), underperforming by 1.75% annualized. ProShares (NOBL) charges 0.35% successful expenses versus KNG’s 0.74%, and competitors similar Amplify CWP Enhanced Dividend Income ETF returned 66% implicit 5 years by selectively penning calls alternatively than overwriting the full portfolio.
Selling covered calls connected prime compounders similar JNJ, which rallied 55% implicit the trailing year, caps the upside that justifies owning Dividend Aristocrats successful the archetypal place, turning superior appreciation into existent income for investors who dainty the monthly organisation arsenic a output trap alternatively than a genuine alternate to stock sales.
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The transportation for the FT Vest S&P 500 Dividend Aristocrats Target Income ETF (NYSEARCA:KNG) lands cleanly successful status conversations. You ain 69 Dividend Aristocrats, the manager writes monthly telephone options against each position, and the money distributes astir 8.6%. KNG turns a handbasket of slow-growing prime compounders into thing resembling a enslaved substitute. The yield, though, comes retired of the aforesaid upside it caps.

The expert who called NVIDIA successful 2010 conscionable named his apical 10 stocks and FT VEST S&P 500 DIVIDEND ARISTOCRATS TARGET INCOME ETF wasn't 1 of them. Get them present FREE.

But is it worthy holding erstwhile compared to the ProShares S&P 500 Dividend Aristocrats ETF (NYSEARCA:NOBL)? Let's find out.

How the money really makes wealth

The underlying handbasket is the S&P 500 Dividend Aristocrats, the aforesaid names sitting wrong NOBL. Think Johnson & Johnson (NYSE:JNJ), which conscionable pushed its quarterly payout to its latest quarterly payout successful its latest consecutive twelvemonth of dividend growth, oregon Procter & Gamble (NYSE:PG), present much than a period into uninterrupted payments. These are companies whose entreaty is dependable net compounding.

KNG overlays the handbasket with covered calls and targets an further 8% output supra the underlying. The manager sells calls monthly, collects premium, and distributes it. That premium is real, and it is besides the lone crushed the header output exists.

The eight-year scoreboard against NOBL

From April 2018 done this week, KNG returned 93% connected a total-return basis. NOBL returned 107% implicit the aforesaid window. That works retired to astir 1.75% of annualized underperformance, which compounds meaningfully implicit 8 years. A $100,000 allocation divided betwixt the 2 astatine inception leaves the NOBL sleeve materially larger today, adjacent aft KNG paid the bigger monthly checks the full way. The income arrived arsenic promised, funded retired of superior appreciation the holder handed away.

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