FTKI vs IWMI

FTKIBFirst Trust Small Cap BuyWrite Income ETF

IWMIBNEOS Russell 2000 High Income ETF

In short

FTKI Most Russell 2000 income funds own the index and sell calls on it. FTKI runs an actively picked basket of roughly 300 US small caps, then writes index-level calls over the top: income first, appreciation second, paid monthly.

IWMI Small-cap income with tax plumbing: Russell 2000 exposure plus an actively managed index-option overlay, paying monthly since its 2024 launch. The fee is 0.68% net of a waiver through May 1, 2027.

Stated mandate

FTKI The Fund seeks current income first and capital appreciation second. It primarily invests in small-cap equities listed on U.S. exchanges and writes exchange-traded calls on the Russell 2000 Index or small-cap equity ETFs.

IWMI The Fund seeks high monthly income with tax efficiency and potential equity appreciation by investing in Russell 2000-related equity exposures and using a call-option strategy.

Why people hold it

• FTKI Two moving parts, one wrapper: an actively chosen small-cap stock portfolio underneath, calls on the Russell 2000 or small-cap ETFs written over the top.ftportfolios.com
• The mandate puts current income first and capital appreciation second, and the cash goes out monthly.ftportfolios.com
• Roughly 300 US-listed small caps sit under the options overlay, spreading the equity risk across the bench instead of a short list of names.

• IWMI The overlay uses index options treated as Section 1256 contracts: gains split 60% long-term, 40% short-term regardless of holding period. NEOS also harvests option losses actively.neosfunds.comx.com
• Actively managed, not a fixed monthly formula. The call writing is adjusted with the aim of keeping some upside participation while income goes out every month.neosfunds.com
• Fee lands near the category median at 0.68% net of a waiver through May 1, 2027, and the fund sits in the upper half of its Russell 2000 income peer group.
• Among the smoother funds in this niche to trade, with trading frictions that screen near the top of the small-cap options-income group.

Worth knowing

• FTKI At 0.86%, it prices above index-run Russell 2000 call writers such as RYLD and RYLG. Active stock selection is what you are paying the difference for.
• Writing calls swaps upside for premium. When small caps run hard, the overlay limits how much of that run the fund keeps.ftportfolios.com
• Launched in 2025 and still a small, lightly traded fund, so bid-ask spreads can run wider than the category's heavyweights.

• IWMI Selling calls caps how much of a small-cap rally the fund keeps. The trade-off for the income stream is a ceiling on upside in fast-rising markets.neosfunds.com
• Part of a distribution can be return of capital, which trims your cost basis rather than arriving as income earned.
• Cheaper tickets exist on the same index: RYLG at 0.35% and RYLD at 0.60%, neither relying on a waiver.

Full FTKI profile⁠

Full IWMI profile⁠