KNG vs OVM

KNGAFT Cboe Vest S&P 500 Dividend Aristocrats Target Income ETF

OVMBOverlay Shares Municipal Bond ETF

In short

KNG Dividend Aristocrats with an income motor bolted on. KNG equal-weights the S&P 500's 25-year dividend raisers, then sells calls on each stock, sized by rule to hit an income target above the index's yield. Monthly payer since 2018.

OVM A muni bond core with an unusual income kicker: OVM writes short-dated S&P 500 put spreads on top of its bonds, so part of the payout comes from equity volatility rather than more duration or credit. Fee: 0.81%, no waiver.

Stated mandate

KNG The Fund seeks to track the price and yield of the Cboe S&P 500 Dividend Aristocrats Target Income Index Monthly Series before fees and expenses.

OVM The Fund seeks total return. It is actively managed and invests through other ETFs or directly in their holdings to obtain exposure to investment-grade and below-investment-grade municipal bonds, while using listed short-term put options to generate income.

Why people hold it

• KNG Base portfolio is the S&P 500 Dividend Aristocrats: roughly 140 companies that have raised dividends for at least 25 straight years, held equal-weighted instead of by market cap.cboe.com
• The overlay is written stock by stock, not as one index-level call, and the call count floats by rule to chase an income target set against the S&P 500's dividend yield.sec.govcboe.com
• Calls cover only part of each position, so a slice of every holding stays uncapped. Income lands monthly.sec.gov
• Running since 2018, well before the covered-call crowd showed up, and one of the stronger implementations in its peer group.

• OVM The income engine is equity volatility, not extra duration: municipal bond holdings at the core, short-dated S&P 500 put spreads written on top.sec.gov
• Defined-risk plumbing: each short put is paired with an equal number of lower-strike long puts, notional capped at net assets, contracts usually expiring in one to two weeks.sec.gov
• Core stays muni: at least 80% of net assets in municipal bonds, investment grade and below. Trading since 2019, so the overlay has seen real bond-market stress.sec.gov
• Among index-overlay income funds, it lands in the upper half of its peer group.

Worth knowing

• KNG Calls cap the upside on the covered portion of each stock, so in a fast rally those shares can lag the Aristocrats the fund holds outright.sec.gov
• Coverage floats with option pricing, so how much of the portfolio is written against (and how much upside stays open) shifts over time.cboe.comsec.gov
• Distributions can include return of capital, which trims your cost basis. At 0.74%, the fee sits about level with the 0.75% cohort median, and it prices like an options strategy.

• OVM 0.81% sits near the category median, and the fund stays small and lightly traded; cheaper overlay peers include LQDW at 0.34% and IDUB at 0.44%.
• The long put strikes below the short put, so the prospectus says it is not expected to completely offset a sharp index decline. Equity air pockets can reach this muni fund.sec.gov
• The options are index options, treated as Section 1256 contracts, so that slice of return does not carry the federal tax exemption muni coupon income does.lsfunds.comsec.gov

Full KNG profile⁠

Full OVM profile⁠