First Trust Dow Jones International Internet ETF (FDNI) Covered Calls

The First Trust Dow Jones International Internet ETF (FDNI) provides targeted exposure to the largest and most actively traded non-U.S. companies in the internet commerce and services sectors. The fund tracks a market-cap-weighted index of 40 global tech giants, excluding those based in the United States.

You can sell covered calls on First Trust Dow Jones International Internet ETF 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 FDNI (prices last updated Thu 4:16 PM ET):

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Core Business and Products

The First Trust Dow Jones International Internet ETF (FDNI) is a premier vehicle for capturing the growth of the "Global Web." While many internet ETFs are dominated by Silicon Valley, FDNI intentionally excludes U.S. companies to focus on international innovators. Its "product" is a concentrated portfolio of 40 stocks that define the digital economy across Asia, Europe, and the Americas. To be included, a company must generate the majority of its revenue from internet-related services or commerce and meet strict liquidity and market cap requirements.

As of 2026, the fund is heavily anchored by the "Big Three" of international e-commerce and social media: Tencent Holdings, Alibaba Group, and Shopify. These three stocks alone often account for nearly 30% of the fund's total weight. Other major 2026 constituents include PDD Holdings (Temu), Spotify, and MercadoLibre. Geographically, China remains the largest exposure (approx. 33%), followed by significant allocations to Canada, the Netherlands, and South Korea, making FDNI a high-beta bet on global consumer discretionary spending and digital transformation.

Competitive Landscape

FDNI operates in a niche that sits between broad international funds and specialized tech sector funds. In 2026, it faces competition from several key angles:

1. First Trust Dow Jones Internet ETF (FDN): Its "sister fund" which focuses exclusively on U.S.-based internet giants like Meta and Amazon. Investors often pair the two for total global coverage.

2. KraneShares CSI China Internet ETF: A more aggressive, country-specific rival. While FDNI is diversified internationally, KWEB provides much deeper, more volatile exposure to the Chinese tech sector.

3. Invesco NASDAQ Next Gen 100 ETF: Competes for "growth-oriented" capital by tracking the next generation of non-financial innovators, many of which are international tech firms.

4. Invesco NASDAQ Internet ETF: A direct rival that includes both U.S. and international internet stocks, offering a "one-stop shop" that competes with FDNI’s international-only mandate.

5. EMQQ Emerging Markets Internet & Ecommerce ETF: Specifically targets the internet sector within emerging markets, overlapping significantly with FDNI’s Asia and Latin America holdings.

Strategic Outlook and Innovation

The strategic appeal of FDNI in 2026 is its role as a "valuation play" against U.S. mega-cap tech. With domestic tech trading at historic premiums, FDNI offers exposure to companies with similar growth profiles but lower multiples. The 2026 outlook is particularly tied to the recovery of Chinese consumer sentiment and the continued global expansion of Agentic AI tools in e-commerce—areas where Shopify and MercadoLibre are currently leading the charge with localized AI assistants.

For the tactical investor, FDNI is technically optionable, but with a major caveat: liquidity is sparse. While an options chain exists, the bid-ask spreads are typically wide, and open interest is low compared to its U.S. counterpart, FDN. This makes it a challenging candidate for high-frequency covered call writing. Most income-seekers in this space prefer to use the much more liquid KWEB or EEM to hedge international exposure, using FDNI primarily as a long-term capital appreciation tool for the non-U.S. internet boom.

Want more examples? FDN Covered Calls | FDP Covered Calls