Natixis Gateway Quality Income ETF (Ticker: GQI) Hits $100 Million in AUM in 6 Months
The Natixis Gateway Quality Income ETF (GQI) has surpassed $100 million in assets within 6 months of its launch on December 13, 2023. This actively managed ETF, focusing on options-based investment strategies, has generated a return of 11.43% since inception through June 30, 2024.
GQI aims to deliver current income of 8-12% per year while maintaining capital appreciation prospects. It combines a factor-based, high-quality equity portfolio with an index-option selling overlay program. The ETF's net expense ratio is 0.34%, making it highly competitive in its space.
The fund's rapid growth demonstrates strong investor interest in income-producing ETFs that offer consistent returns while remaining invested in the stock market. GQI's strategy is particularly appealing to risk-conscious investors and retirees seeking income in volatile market conditions.
- GQI reached $100 million in assets under management within 6 months of launch
- Generated a return of 11.43% since inception through June 30, 2024
- Aims to deliver current income of 8-12% per year
- Low net expense ratio of 0.34%, making it highly competitive
- Rapid investor adoption indicates strong market demand for the product
- None.
Insights
The Natixis Gateway Quality Income ETF (GQI) achieving
GQI's net expense ratio of
For retail investors, the stability and consistent income generation are appealing. However, understanding the underlying options strategies and their potential impact on returns is essential. The ETF's approach of using a multifactor quantitative model to select high-quality equities, combined with an options overlay, aims to balance income and capital appreciation, which can be advantageous in both bull and bear markets.
Investors should consider their risk tolerance and investment goals when evaluating GQI. While the early performance and growth are promising, it’s wise to monitor how the ETF performs in different market cycles and how the options strategy adapts to changing conditions.
GQI's rapid growth to
The ETF's strategy of combining a high-quality equity portfolio with an options-selling overlay is relatively unique in the market. This approach targets risk-conscious investors seeking consistent income, which is particularly important in times of heightened market volatility. The ETF's availability on major custodian platforms and through regional broker-dealers expands its accessibility, potentially contributing to its swift AUM growth.
From a market perspective, the low net expense ratio of
Retail investors should be aware of the ETF’s dual focus on income generation and capital appreciation. While the options strategy can provide consistent income, it’s important to understand how this might impact overall performance during market downturns. The ETF’s success thus far suggests it has struck a favorable balance, but ongoing performance and market conditions will be key factors to watch.
The utilization of an options-based strategy in the GQI ETF is a significant aspect of its investment approach. Gateway’s longstanding experience in options trading is leveraged to generate consistent monthly income for investors. The ETF's strategy involves selling S&P 500 Index call options on 50% of its equity portfolio, which helps to mitigate downside risk while earning premium income.
For retail investors, it's essential to understand the mechanics of this strategy. Selling call options can cap potential upside but provides a steady income stream, which can be particularly attractive during periods of market uncertainty or when equity markets are flat. The trade-off between limiting upside potential and generating income is a key consideration for investors assessing this ETF.
Additionally, the laddered portfolio of one-month, near-the-money options adds a level of sophistication and requires active management to adjust to changing market conditions. This dynamic approach aims to balance capital appreciation with income generation, making it suitable for investors seeking stable returns rather than high growth.
Overall, the options strategy enhances the income-generating capability of GQI but also introduces complexities that investors should be mindful of. Understanding how the options overlay works and its potential impact on returns is important for making informed investment decisions.
• GQI – the first ETF in Gateway’s 47-year history – has blazed a path to
• Gateway Investment Advisers, LLC has exclusively focused on options-based strategies to manage risk and generate cash flow since 1977; the investment management team has almost 100 cumulative years of industry experience
• GQI’s net expense ratio is only
This actively managed, income-generating equity ETF seeks to deliver current income in the range of 8
“We are delighted with the rapid investor adoption of GQI, Gateway’s first ETF, in recognition of our team’s decades of experience helping clients reduce the risks of stock market investing through actively managed options-based equity strategies,” said Michael T. Buckius, CFA®, CIO of Gateway, and co-portfolio manager of GQI. “Gateway is proud to offer this actively managed ETF for investors who seek consistent income and wish to remain invested in the stock market.”
“The explosive growth of GQI in six short months demonstrates that investors are starving for simple products that solve complex problems. As an active, income-producing ETF, GQI allows investors to stay invested in the stock market – especially important in these volatile times – while offering consistent income,” said Nicholas Elward, SVP and head of institutional product and ETFs at Natixis Investment Managers. “We have long believed in Gateway’s index option-based low-volatility equity strategies, and we’re thrilled that GQI has become such a standout strategy in the portfolios of risk-conscious investors and retirees looking for income.”
Gateway uses a multifactor quantitative model to construct and manage GQI’s stock portfolio. The model evaluates
1 As of the most recent prospectus, the investment advisor has contractually agreed to waive fees and/or expenses (with certain exceptions) once the expense limitation of the fund has been exceeded. This arrangement is set to expire on 4/30/26. When an expense limitation has not been exceeded, the gross and net expense ratios and/or yields may be the same.
The features of an actively managed options overlay program are built into the GQI strategy and are designed to generate consistent monthly income for investors. Replicating the characteristics of a laddered portfolio of one-month, near-the-money S&P 500® Index call options sold on a rolling weekly basis, the options overlay is implemented on 50 percent of GQI’s equity portfolio to balance capital appreciation with income.
Day-to-day management of GQI is the responsibility of Gateway’s Daniel M. Ashcraft, Vice President and Portfolio Manager; Michael T. Buckius, CEO, CIO, President and Portfolio Manager; Kenneth H. Toft, Senior Vice President and Portfolio Manager; and Mitchell J. Trotta, Portfolio Manager. Together, the team averages 20 years of tenure with Gateway. GQI’s primary listing venue is the New York Stock Exchange (NYSE).
About Gateway Investment Advisers
Based in
About Natixis Investment Managers
Natixis Investment Managers’ multi-affiliate approach connects clients to the independent thinking and focused expertise of more than 15 active managers. Ranked among the world’s largest asset managers1 with more than
Headquartered in
Natixis Investment Managers’ distribution and service groups include Natixis Distribution, LLC, a limited purpose broker-dealer and the distributor of various US registered investment companies for which advisory services are provided by affiliated firms of Natixis Investment Managers, Natixis Investment Managers S.A. (Luxembourg), Natixis Investment Managers International (
1 Cerulli Quantitative Update: Global Markets 2023 ranked Natixis Investment Managers as the 17th largest asset manager in the world based on assets under management as of December 31, 2022.
2 Assets under management (“AUM”) of current affiliated entities measured as of March 31, 2024, are
3 A brand of DNCA Finance.
________________________________________________________________
Average annualized total returns (%) † as of 6/30/2024
|
3 months |
YTD |
Since Inception (12/13/23) |
ETF (NAV) |
2.42 |
9.28 |
11.43 |
ETF (Market Price) |
2.36 |
9.44 |
11.43 |
S&P 500® Index |
4.28 |
15.29 |
18.51 |
Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results. Total return and value will vary, and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For most recent month-end performance, visit im.natixis.com. An exchange-traded fund’s market price is the price at which shares in the ETF can be bought or sold on the exchanges during trading hours, while the net asset value (NAV) represents the value of each share’s portion of the fund’s underlying assets and cash at the end of the trading day. ETFs calculate the NAV at 4 p.m. ET, after the markets close. †Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any. You may not invest directly in an index.
Investment Strategy Risks
Exchange-Traded Funds (ETFs) trade like stocks, are subject to investment risk, and will fluctuate in market value. Unlike mutual funds, ETF shares are not individually redeemable directly with GQI and are bought and sold on the secondary market at market price, which may be higher or lower than the ETF's net asset value (NAV). Transactions in shares of ETFs will result in brokerage commissions, which will reduce returns.
Unlike typical exchange-traded funds, there are no indexes that the GQI attempts to track or replicate. Thus, the ability of GQI to achieve its objectives will depend on the effectiveness of the portfolio manager. There is no assurance that the investment process will consistently lead to successful investing.
Investments in Equity-Linked Notes (ELNs) are subject to liquidity risk, which means there may not be an active market for ELNs which would prevent them from being sold at a fair price. Since ELNs are in note form, they are subject to certain debt securities risks, such as credit or counterparty risk. Should the prices of the underlying instruments move in an unexpected manner, GQI may not achieve the anticipated benefits of an investment in an ELN, and may realize losses, which could be significant and could include GQI’s entire principal investment.
Options may be used for hedging purposes, but also entail risks related to liquidity, market conditions and credit that may increase volatility. The value of GQI's positions in options may fluctuate in response to changes in the value of the underlying asset. Selling call options may limit returns in a rising market.
Equity securities are volatile and can decline significantly in response to broad market and economic conditions.
GQI is new with a limited operating history.
Definitions
The S&P 500® Index is a widely recognized measure of US stock market performance. It is an unmanaged index of 500 common stocks chosen for market size, liquidity, and industry group representation, among other factors; it also measures the performance of the large-cap segment of the US equities market. You may not invest directly in an index.
Before investing, consider GQI’s investment objectives, risks, charges, and expenses. Visit https://www.im.natixis.com/en-us/products/exchange-traded-funds for a prospectus or a summary prospectus containing this and other information. Read it carefully.
Natixis Advisors, LLC is the adviser and Gateway Investment Advisers, LLC is the subadvisor for the Natixis Gateway Quality Income ETF.
ALPS Distributors, Inc. is the distributor of the Natixis Gateway Quality Income ETF. Natixis Distribution, LLC is a marketing agent. ALPS Distributors, Inc. is not affiliated with Natixis Distribution, LLC.
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Press Contacts:
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Denise.Robbi@natixis.com
Kelly Cameron
617-449-2543
Kelly.Cameron@natixis.com
Source: Natixis Investment Managers
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