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Quality Income
High-Quality Equity, Robust Monthly Income
Gateway’s Quality Income strategy combines the firm’s distinct expertise in quantitatively driven equity portfolio management and index option-based investing to provide a strategy that seeks to deliver consistent long-term growth and monthly income driven by equity market volatility.
Quality Income pairs a portfolio of high-quality, durable companies with an options overlay strategy1. High-quality, durable companies enable broad market participation while maintaining the potential for defense and may benefit from rising markets or provide protection during time of uncertainty. The options overlay creates potential to enhance risk-adjusted return by accessing the implied volatility risk premium, generating robust and consistent cash flow while reducing the risk associated with equity market exposure.
Broad Application for Better Outcomes
Building option cash flow into a portfolio can provide current income while potentially enhancing return and diversification over the long-term. Gateway’s Quality Income strategy can be employed in a variety of portfolio applications, offering potential for strong market participation and cash flow while reducing volatility, downside risk, and exposure to interest-rate-sensitive investments.
Income Model Component
- Generates consistent cash flow
- Cash flow driven by option premiums and dividends, not interest rates
- Alternative to dividend yield strategies
Conservative Equity Allocation
- Broad-based equity market exposure
- Emphasizes high-quality companies
- Complements minimum volatility strategies
Complement to Credit
- Attractive yield relative to fixed income
- Avoids interest rate risk
- Substitutes or complements, particularly to high yield
1 Option overlay characteristics may be achieved with the use of equity-linked notes, or ELNs. Index-option and/or ELN activity provides income and reduces volatility.
