First Trust VL Dividend (FVD) Covered Calls

The First Trust Value Line Dividend Index Fund (FVD) is a passively managed ETF that tracks the Value Line Dividend Index. The fund selects U.S. companies that hold high safety rankings and provide above-average dividend yields. By maintaining an equal-weighted portfolio, FVD seeks to provide income-focused investors with steady cash flow, reduced volatility, and consistent exposure to high-quality, dividend-paying equities across a broad range of sectors.

You can sell covered calls on First Trust VL Dividend to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for FVD (prices last updated Mon 4:16 PM ET):

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Core Business and Products

FVD differentiates itself by utilizing a proprietary safety ranking system to identify financially stable companies. It focuses on firms with a history of maintaining or growing dividends, regardless of market cycles. By limiting the portfolio to larger, well-established companies with strong balance sheets, the fund serves as a "defensive" equity holding intended to mitigate portfolio risk while generating sustainable income.

Top 3 Holdings

The fund’s performance is anchored by a diversified set of high-quality holdings, including:

1. Thomson Reuters Corporation (TRI)
2. International Business Machines Corporation (IBM)
3. Paychex, Inc. (PAYX)

These companies are established industry leaders with long histories of consistent dividend payments and highly liquid options chains, making them suitable for investors seeking to generate additional income through covered calls or other derivatives.

Competitive Landscape

FVD operates in the highly competitive dividend-income ETF space. Key optionable competitors include:

1. Schwab U.S. Dividend Equity ETF (SCHD): Competes directly by focusing on high-quality, sustainable dividend payers but typically uses a different selection methodology centered on cash flow and yield fundamentals.
2. Vanguard Value ETF (VTV): A major competitor in the large-cap value space that tracks a broader market index, often used as a lower-cost alternative for investors seeking core value exposure.
3. iShares Core Dividend Growth ETF (DGRO): Focuses more heavily on dividend *growth* rather than pure current yield, attracting investors with a longer time horizon who prioritize capital appreciation alongside income.

Strategic Outlook and Innovation

FVD remains an evergreen instrument for income-oriented investors. While it may lag during rapid growth rallies due to its conservative, safety-oriented selection methodology, it tends to show resilience during market downturns. As interest rate environments evolve, FVD’s focus on companies with strong balance sheets and established payout track records provides a transparent, efficient way to maintain defensive positioning.

Want more examples? FVAL Covered Calls | FVRR Covered Calls