For investors seeking to fortify cash flow within their portfolio, an options strategy can be a valuable addition.
Many investors opt for options due to the potential for consistent cash flow. When used correctly, this strategy can be a valuable means of increasing income.
However, the benefits don’t stop at income. Due to their hedging properties, an options strategy could provide lower-risk market exposure.
Recently, Gateway Investment Advisers released interesting insights on its options strategy. Among other topics, Gateway highlighted why it chooses to focus on the quality factor. According to Gateway, a quality strategy can create robust dividends and market exposure, with the added benefit of mitigating some volatility.
“Options-based investing can be complex, but it does not have to be. The consistent application of a disciplined, active investment management process backed by an extensively experienced team can add value for investors and improve outcomes in all environments,” the Gateway research added. “Since 1977, Gateway has developed a distinct expertise in quantitatively driven equity portfolio management paired with index option-based investing and currently offers a suite of products with the potential to mitigate risk and enhance risk-adjusted return.”
The Gateway Strategy
Investors seeking to leverage Gateway’s strategy within their portfolio could utilize the Natixis Gateway Quality Income ETF (GQI ). GQI is an actively managed ETF that provides a mix of high-quality equities with an options overlay.
True to Gateway’s vision for quality companies, GQI’s portfolio consists of resonating large-cap players like Nvidia, Microsoft, and Apple. This is paired with an options portfolio consisting of both index options and equity-linked notes.
With a quality-focused options portfolio in play, GQI could provide consistent income along with good large-cap exposure. By focusing on more reliable equities alongside the strategy, GQI can provide long-term value and income while mitigating potential volatility risk.
GQI’s strategy has already displayed good potential for long-term results. As of August 28th, 2024, the fund’s NAV has risen 9.95% year-to-date.
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