An 8% Monthly Pay Yield Tied To The Nasdaq 100
It s unusual to find an ETF that combines high yield, managed risk and exposure to the world s fastest growing tech stocks.
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Jan 17, 2021
With the S&P 500 only yielding about 1.5% and 10-year Treasuries just recently moving above the 1% level, it s been difficult for investors to achieve anything remotely resembling a decent yield. That is unless you re willing to reach out on the risk spectrum to things, such as junk bonds or mortgage-backed securities.
The closed-end fund market is a popular landing spot for income seekers thanks to their many 8-10% yields, but those often require leverage to achieve, wade heavily into riskier senior loans & junk debt and are prone to distribution cuts. There are no really good options for attaining a high yield without taking a fair amount of risk in the process.
NUSI Effective Way to Boost Income
With a steady, monthly distribution and a yield well in excess of traditional equity benchmarks and 10-year Treasuries, NUSI can help retirees augment income streams.
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.
December 22, 2020
Some income strategies leave investors wanting more income and others are more trouble than they’re worth owing to high risks, poor credit ratings, and vulnerable dividends, among other flaws. The
Nationwide Risk-Managed Income ETF (NYSEArca: NUSI)doesn’t check any of those boxes and that’s a positive in today’s low-yield environment.
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. The fund is a “rules-based options trading strategy that seeks to produce high income using the Nasdaq-100 Index,” according to Nationwide.