Cboe Vest Announces Expected Effective Date of Cboe Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG) Reorganization into FT Cboe Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG)
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Cboe Vest Announces Expected Effective Date of Cboe Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG) Reorganization into FT Cboe Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG)

Tuesday, February 23, 2021 11:20 PM
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  • KNG, launched in 2018 by Cboe Vest, gives investors access to a Target Income StrategyTM, targeting annualized income of 3.0% over the annual dividend yield of S&P 500 Index, with proportional price returns, in a single ticker.
  • Cboe Vest will serve as sub-advisor for KNG after the reorganization, anticipated to become effective prior to the opening of CBOE on March 1, 2021.

McLEAN, VA / ACCESSWIRE / February 23, 2021 / Cboe Vest Financial LLC ("Cboe Vest"), the inventor of Target Outcome Investments®, announced today, that subject to the satisfaction of certain customary closing conditions, the reorganization of Cboe Vest S&P 500® Dividend Aristocrats Target Income ETF (Cboe: KNG)(BATS:KNG), an index-based exchange-traded fund managed by Cboe Vest, into FT Cboe Vest S&P 500 Dividend Aristocrats Target Income ETF (the "FT Cboe Vest ETF"), an index-based ETF managed by First Trust Advisors ("FTA") and sub-advised by Cboe Vest, is expected to become effective immediately before the opening of CBOE on March 1, 2021.

Upon the completion of the reorganization, which is expected to be tax-free, the assets of KNG will be transferred to, and the liabilities of KNG will be assumed by, the FT Cboe Vest ETF. The shareholders of KNG will receive shares of the FT Cboe Vest ETF (and cash with respect to fractional shares) with a value equal to the aggregate net asset value of the shares of KNG held by them immediately prior to the reorganization. The FT Cboe Vest ETF will retain the original ticker (Cboe: KNG).

KNG (inception date: March 26, 2018) is index-based and seeks to track the Cboe S&P 500 Dividend Aristocrats Target Income Index Monthly Series (Symbol: SPATI), an index designed to track the performance of a partial overwriting strategy applied to the stock holdings of the well-known S&P 500 Dividend Aristocrats Index.

KNG seeks to solve the income dilemma brought on by low yields and concerns over fixed-income securities as a source of regular income. KNG targets portfolio yield, pursuing a strategy that seeks to convert a portion of the potential upside performance of dividend growers into current income. The strategy seeks to:

  • Provide annualized income from stock dividends and option premiums of approximately 3% over the annual dividend yield of the S&P 500 Index and
  • Generate price returns that are proportional to the price appreciation of the S&P 500 Index, before fees and expenses.

Karan Sood and Howard Rubin, of Cboe Vest, will continue to serve as portfolio managers for the fund after the reorganization. The portfolio managers are jointly and primarily responsible for the day-to-day management of the fund.

About Cboe Vest

Cboe Vest is the creator of Target Outcome Investments®, which strive to buffer losses, amplify gains or provide consistent income to a diverse spectrum of investors. Today, Cboe Vest's Target Outcome StrategiesTM are available in more than 50 ETFs, mutual funds, unit investment trusts (UITs), collective investment trusts (CITs), and customizable managed accounts / sub-advisory services. The firm's Total Assets Under Management and Supervision are approximately $2.5 billion as of December 31, 2020. For more information about Cboe Vest or to explore the evolution of Target Outcome Investments, visit cboevest.com/#/timeline.

About First Trust

First Trust is a federally registered investment advisor and, after the reorganization will serve as the fund's investment advisor. First Trust and its affiliate First Trust Portfolios L.P. ("FTP"), a FINRA registered broker-dealer, are privately held companies that provide a variety of investment services. First Trust has collective assets under management or supervision of approximately $171 billion as of December 31, 2020 through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and separate managed accounts. First Trust is the supervisor of the First Trust unit investment trusts, while FTP is the sponsor. FTP is also a distributor of mutual fund shares and exchange-traded fund creation units. First Trust and FTP are based in Wheaton, Illinois. For more information, visit www.ftportfolios.com.

CONTACT

Linda Werner, Cboe Vest
703-864-5483

Ryan Issakainen, First Trust
630-765-8689

DISCLOSURES

Investors should consider the investment objectives, potential risks, management fees and charges and expenses carefully before investing. This and other information is contained in the Fund's statutory and summary prospectus, which may be obtained by calling 855-979-6060, or, when available, by visiting cboevest.com/etfs. Please read the prospectus carefully before investing.

Investments involve risk. Principal loss is possible. The fund may trade at a premium or discount to NAV. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.

Investors should consider the investment objectives, potential risks, management fees and charges and expenses carefully before investing. This and other information is contained in the Fund's statutory and summary prospectus, which may be obtained by visiting www.cboevest.com/etfs. Please read the prospectus carefully before investing.

To the extent the Fund invests more heavily in particular sectors of the economy, the Fund's performance may be more sensitive to developments that significantly affect those sectors. The Fund is non-diversified and may concentrate its assets in fewer holdings than a diversified fund. Therefore, the Fund is more exposed to individual stock volatility. The Fund's emphasis on dividend-paying stocks could fall out of favor, or companies could reduce or eliminate dividends. Derivatives, such as the options in which the Fund invests, can be volatile and involve various types and degrees of risks, depending upon the characteristics of a particular derivative. Derivatives may entail investment exposures that are greater than their cost would suggest, meaning that a small investment in a derivative could have a substantial impact on the performance of the Fund. Writing call options are speculative activities and entail greater-than-ordinary investment risks. The Fund's use of derivatives, such as call options, can lead to losses because of adverse movements in the price or value of the underlying stock, which may be magnified by certain features of the options. These risks are heightened when the Fund's portfolio managers use options to enhance the Fund's return or as a substitute for a position or security. When selling a call option, the Fund will receive a premium; however, this premium may not be enough to offset a loss incurred by the Fund if the price of the underlying stock is above the strike price by an amount equal to or greater than the premium. The Fund's use of options may reduce the Fund's ability to profit from increases in the value of the underlying stock(s). The Fund may "turn over" some or all of its Covered Calls as frequently as weekly, and higher portfolio turnover may result in the Fund paying higher levels of transaction costs and generating greater tax liabilities for shareholders The Fund's covered call strategy may limit its ability to distribute dividends eligible for treatment as qualified dividend income and to distribute dividends eligible for the dividends-received deduction for corporate shareholders. For these reasons, a significant portion of income received from the Fund may be subject to tax at effective tax rates that are higher than the rates that would apply if the Fund were to engage in a different investment strategy. As with all index funds, the performance of the Fund and its Index may differ from each other for a variety of reasons. For example, the Fund incurs operating expenses and portfolio transaction costs not incurred by the Index. In addition, the Fund may not be fully invested in the securities of the Index at all times or may hold securities not included in the Index. There can be no guarantee that the Index or Fund will be successful in achieving the objective. The total return performance of the Index and Fund could be negative, even when the Fund achieves its objectives. Read the "Principal Risk" section of the Prospectus for a complete listing of fund-specific risks. The expense ratio for KNG is 0.75%. The Cboe S&P 500 Dividend Aristocrats Target Income Index Monthly Series (Ticker: SPATI) is a benchmark index designed to track the performance of a hypothetical partial buy-write strategy on constituents of the S&P 500 Dividend Aristocrats Index. An investment cannot be made directly in an index. The S&P 500® Dividend Aristocrats® Index (Ticker: SPDAUDP), constructed and maintained by S&P Dow Jones Indices LLC, targets companies that are currently members of the S&P 500, have increased dividend payments each year for at least 25 years, and meet certain market capitalization and liquidity requirements. Smart beta refers to investment strategies that emphasize the use of alternative weighting schemes to traditional market capitalization-based indices. Beta is a measure of a stock's volatility relative to the overall market. Duration is an approximate measure of a bond's price sensitivity to changes in interest rates. A covered call is an options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset in an attempt to generate increased income from the asset. A covered call is also known as a "buy-write".

Copyright ©Cboe Vest Financial Group 2021. Target Outcome Investment is a registered trademark of Cboe Vest Financial. Target Outcome Strategy is a trademark of Cboe Vest Financial.

Distributed by Quasar Distributors, LLC.

SOURCE: Cboe Vest Financial LLC

Cboe Vest Financial LLC
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