With rising rates and market volatility, investors are currently operating in a challenging income-driven environment. Thus, Harvest Volatility Management has partnered with Nationwide Financial to develop a suite of managed risk income ETFs to provide an alternative source of income in such an environment.
“As we all know, fixed income securities have been very challenged, equity volatility is quite high, and for us, we wanted to develop who could provide consistent monthly income for income-oriented investors,” he said. said Garrett Paolella, Managing Director and Portfolio Manager. at HMV.
Looking for an income
Speaking to Lara Crigger, ETF Trends editor for ETF Leaders, powered by the New York Stock Exchange, Paolella said he was hearing “a lot of concern” from investors and advisers over a good number of things. They are increasing cash allocations, they are worried about rate hikes, “fixed income market volatility” as well as equity markets.
“They’re looking for revenue,” Paolella told Exchange: An ETF Experience 2022. “It’s a very tough revenue-driven market right now.”
Paolella explained that since fixed income securities have negative real returns, advisors “generally try to find other ways to meet their clients’ needs.” Getting income in a time of heightened volatility is now “a big question”.
While earning income is one of the biggest challenges for investors, so is managing risk. For advisors and intermediaries HVM spoke to, Paolella said “it’s a tough market just to manage risk for clients.”
“They’re used to seeing their accounts grow over the last 10+ years,” Paolella said, adding that when we enter an environment where 60-40 asset allocation doesn’t work and clients lose money, it pushes the discussion around managing volatility and risk while trying to meet their income needs.
HVM’s managing director reiterated that Nationwide’s managed income suite products “have been developed specifically to meet income needs, lower overall volatility in the portfolio, but seek to have tax-efficient income on a monthly”.
Nationwide offers a suite of actively managed ETFs within stocks for financial advisors. These funds include National Nasdaq-100 Managed Income Risk ETF (NUSI)the S&P 500 National Managed Income Risk ETF (NSPI)the National Dow Jones Risk-Managed Income ETF (NDJI)and the National Russell 2000 Managed Income at Risk ETF (NTKI).
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