The Nationwide Risk-Managed Income ETF (NUSI) is an increasingly prominent retirement strategy, but that doesn’t mean the exchange traded fund lacks for demographic relevan
NUSI is an actively managed portfolio of stocks included in the Nasdaq-100 Index and an options collar. Per index rules, the fund only invests in the top 100 largest by market cap, nonfinancial stocks listed on NASDAQ. A collar strategy involves selling or writing call options and buying put options, thus generating income to hedge some downside risk. The strategy seeks to generate high current income monthly from any dividends received from the underlying stock and the option premiums retained.
“For most people, Social Security benefits won’t cover all the bills in retirement. To land in retirement in solid financial shape, you also want to build your own savings in 401(k) plans and individual retirement accounts,” reports Carla Fried for CNBC.
A Fund for All Demographics
NUSI can act as a complement to traditional equity and fixed income allocations or as the ideal protective hedge for investors with heavy exposure to technology and growth stocks because the fund is a “rules-based options trading strategy that seeks to produce high income using the Nasdaq-100 Index,” according to Nationwide.
The Nationwide Risk-Managed Income ETF incorporates options exposure to help generate income and mitigate risk as a way to enhance total returns. Investors have long capitalized on covered call options strategies for income generation or protective put options strategies to protect against and limit losses.
“It’s never too early to get started. (Hint: compound growth is your best investing friend.) Nor is it ever too late to make progress. (Another hint: Worried you won’t have enough retirement income? Consider ways to reduce your spending needs in retirement.),” according to CNBC. “Like any big goal, breaking it down into manageable bite-size pieces keeps the task from veering into overwhelming. Focusing on a few key moves in each decade will set you up for a successful retirement.”
Thanks to a systematic rules-based options strategy, one can minimize market volatility’s negative effects and minimize downside risk. This was accomplished through the constant ownership of a fully-financed market hedge. As a result, NUSI saw its volatility decline. This allows for an allocation for this type of alternative to lower the volatility in an investor’s portfolio while delivering a consistent stream of income, regardless of market volatility.