With interest rates still low, it’s hard to generate income, but investors can do better than basic bond funds. A potential starting point is the Nationwide Risk Managed Income ETF (NYSEArca: NUSI), an exchange-traded fund designed for investors of all ages.
NUSI can serve as a supplement to traditional equity and fixed income allocations, or as a protective cover for investors with high exposure to technology and growth stocks. The fund is a rules-based options trading strategy that seeks to generate high income using the Nasdaq-100 index.
NUSI can serve as a complement to traditional equity and fixed income allocations or potentially as a hedge for investors with high exposure to technology and growth stocks, as the fund is a “rules-based options trading strategy that aims to produce high income using the Nasdaq index 100 â, according to Nationwide.
NUSI is not a fixed income ETF. In general, it has low rate sensitivity. With benefits like these, it’s no surprise that the fund recorded $ 122.46 million in revenue this year.
NUSI: First income destination
NUSI is an actively managed portfolio of stocks included in the Nasdaq-100 index and an options necklace. In accordance with the index rules, the fund invests only in the 100 largest non-financial stocks by market capitalization listed on the NASDAQ. This tunnel strategy involves the writing or writing of call options and the purchase of put options, thereby generating income to provide hedge against certain downside risks. The strategy aims to generate a high monthly current income from the dividends received from the underlying stocks and the option premiums retained.
A covered call refers to an options strategy in which an investor writes or sells a call option on an asset that they already own or bought on a share-for-share basis in order to generate income through premiums derived from the selling call options. The covered buy strategy limits upside potential and seeks to provide limited downside protection with the purchase of a long-term put, so it is ideal for investors with a neutral to bullish outlook.
Hedged buying strategies can potentially increase a portfolio during times of heightened volatility. Covered calls allow an investor to be long in an asset while simultaneously writing or selling call options on the same asset.
To learn more about income strategies, visit our Retirement Income Channel.
This article was prepared as part of Nationwide Paid Sponsorship of ETF Trends.
The performances quoted represent past performances; Past performance is no guarantee of future results. The performance of the index is not representative of the performance of the fund. You cannot invest directly in an index. Please call 1-877-893-1830 for the performance of the fund.
ETFs, hedge funds, stocks, bonds and other asset classes have different risk profiles, which should be taken into account when investing. All investments involve risk and may lose value. Investing involves risks, including the possible loss of capital. Shares of any ETF are bought and sold at market prices (not net asset value), may trade at a discount or a premium to net asset value, and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. The performance of the Fund may not match or have a high degree of correlation with the performance of the Underlying Index.
NUSI prospectus (hyperlink to: https://nationwidefunds.onlineprospectus.net/nationwidefunds/NUSI/index.html)
Call 1-800-617-0004 to request a summary prospectus and / or a prospectus. You can also download the prospectus at the link above or by visiting etf.nationwide.com. These prospectuses describe the investment objectives, risks, fees, charges and expenses, as well as other information which you should read and consider carefully before investing.
KEY RISKS: The Fund is subject to risks associated with investing in equity securities, including follow-up shares (a class of ordinary shares that ‘tracks’ the performance of a unit or division within a largest company). The value of a trailing stock may go down even if the stock of the largest company grows in value. The Fund is subject to the risks of investing in foreign securities (currency fluctuations, political risks, differences in accounting and limited availability of information, all of which are magnified in emerging markets). The Fund may invest in more aggressive investments such as derivatives (which create investment leverage and illiquidity and are very volatile). The Fund uses a collar options strategy (the use of calls and puts is speculative and may result in losses due to adverse movements in the price or value of the reference asset). The success of the Fund’s investment strategy may depend on the effectiveness of the sub-advisor’s quantitative tools for security selection and data provided by third parties. The Fund plans to invest a portion of its assets to track the holdings of an index. The correlation between the performance of the Fund and the performance of the index may be affected by the expenses of the Fund and because the Fund may not be fully invested in the securities of the index or may hold securities not included in the index. index. The Fund may frequently buy and sell portfolio securities and other assets to rebalance its exposure to various market sectors. A higher portfolio turnover may result in higher levels of transaction costs paid by the Fund and higher tax obligations for shareholders. The Fund may focus on specific sectors or industries, subjecting it to higher volatility than other ETFs. The Fund may hold large positions in a small number of securities, and an increase or decrease in the value of such securities may have a disproportionate impact on the value and total return of the Fund. Although the Fund intends to invest in a variety of securities and instruments, the Fund will be considered undiversified. The additional risk of the Fund includes: the risk associated with the covered option strategy, the correlation risk, the risk associated with the derivatives, the risk of foreign investment and the risk of sector concentration.
Nasdaq-100 index: An unmanaged, market-capitalization-weighted index of equity securities issued by 100 of the largest non-financial corporations, with certain rules limiting the influence of the largest constituents. It is exchange-based and is not an index of companies based in the United States. The performance of the market index is provided by a third party source that Nationwide Funds Group believes to be reliable (Morningstar). The indices are not managed and have been provided for comparison purposes only. No fees or expenses have been reflected. Individuals cannot invest directly in an index.
Nationwide Fund Advisors (NFA) is the registered investment advisor to the Nationwide ETFs, which are distributed by Quasar Distributors LLC. NFA is not affiliated with any distributor, sub-advisor or index provider contracted by NFA for the Nationwide ETFs.
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MFM-4180AO (06/2021) Q-20210630-0095