Three new Risk-Managed Income ETFs seek to offer income and downside protection
New Nationwide solutions offer an innovative approach to traditional sources of income with the potential for equity market participation
In response to investor demand for additional income solutions that employ the underlying investment strategy of the Nationwide Nasdaq-100® Risk-Managed Income ETF (trading symbol: NUSI), Nationwide has launched three additional Risk-Managed Income ETFs: Nationwide S&P 500® Risk-Managed Income ETF (NSPI), Nationwide Dow Jones® Risk-Managed Income ETF (NDJI)and the Nationwide Russell 2000® Risk-Managed Income ETF (NTKI).
Nationwide Risk-Managed Income ETFs seek to deliver high current income with a measure of downside protection in falling markets and the potential for upside equity participation through exposure to some of the most well-known domestic indexes. They provide investors with greater optionality for managing their exposure to different sources of risk and return, while targeting secular opportunities as part of a diversified, core income allocation.
“With 10-year Treasury yields near historic lows, and the risk of inflation putting pressure on purchasing power, investors are looking to generate higher current income while managing downside risk,” said Mike Spangler, Leader of Nationwide’s Investment Management Group.
The new Risk-Managed Income ETFs offer exposure to some of the most well-known domestic indexes:
The Nationwide S&P 500® Risk-Managed Income ETF (NSPI) invests in the companies in the S&P 500® Index, which is widely regarded as a diversified gauge of the large-cap U.S. equity market.
With the Nationwide Dow Jones® Risk-Managed Income ETF (NDJI), investors gain exposure to the Dow Jones Industrial Average®, a blue-chip index of companies historically recognized for their financial stability and consistent dividends.
The Nationwide Russell 2000® Risk-Managed Income ETF (NTKI) gives investors access to the Russell 2000® Index, a comprehensive barometer of the small-cap segment of the U.S. equity market.
“The new offerings will seek to deliver the income and downside protection benefits that investors have come to expect from Nationwide, while also providing investors with greater flexibility when managing their exposure to different sources of risk and return and when targeting secular opportunities as part of a diversified, core income allocation,” added Spangler.
Subadvised by Harvest Volatility Management LLC, the new Nationwide Risk-Managed Income ETFs are listed on the New York Stock Exchange and each have an expense ratio of 0.68%.
“These new Risk-Managed Income ETFs are designed for income-focused investors seeking to lower their exposure to market volatility and minimize the potential for losses during down markets,” said Curt Brockelman, Co-Founder and Managing Partner of Harvest Volatility Management LLC. “We are proud to expand our partnership with Nationwide to subadvise these additional solutions, which offer both income potential and downside protection.”
According to a recent income survey of advisors and financial professionals conducted for Nationwide by ETF Trends, nearly 9 in 10 (86%) advisors are at least somewhat concerned about achieving their clients’ income needs over the next three years. Nearly 8 in 10 are comfortable with non-traditional income strategies for their clients.
To learn more about the Nationwide Risk-Managed Income ETFs, investors should contact their financial professional or visit here. Financial professionals interested in learning more about Nationwide ETFs can call 1-877-893-1830. Additional insights can be found by clicking on this infographic.
This material is not a recommendation to buy or sell a financial product or to adopt an investment strategy. Investors should discuss their specific situation with their financial professional.
Call 800-617-0004 to request a summary prospectus and/or a prospectus, or download prospectuses at etf.nationwide.com. These prospectuses outline investment objectives, risks, fees, charges and expenses, and other information that you should read and consider carefully before investing.
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. The Fund’s return may not match or achieve a high degree of correlation with the return of the underlying index.
KEY RISKS: The Nationwide Nasdaq-100® Risk-Managed Income ETF, Nationwide S&P 500® Risk-Managed Income ETF, Nationwide Dow Jones® Risk-Managed Income ETF, and Nationwide Russell 2000® Risk-Managed Income ETF (collectively, the “Risk-Managed Income ETFs”) are subject to the risks of investing in equity securities, including tracking stock (a class of common stock that "tracks" the performance of a unit or division within a larger company). A tracking stock's value may decline even if the larger company's stock increases in value. The Risk-Managed Income ETFs are subject to the risks of investing in foreign securities (currency fluctuations, political risks, differences in accounting and limited availability of information, all of which are magnified in emerging markets).
The Risk-Managed Income ETFs may invest in more-aggressive investments such as derivatives (which create investment leverage and illiquidity and are highly volatile). The Risk-Managed Income ETFs employ a collared options strategy (using call and put options is speculative and can lead to losses because of adverse movements in the price or value of the reference asset). The success of the Risk-Managed Income ETFs’ investment strategy may depend on the effectiveness of the subadviser's quantitative tools for screening securities and on data provided by third parties. The Risk-Managed Income ETFs expect to invest a portion of their assets to replicate the holdings of an index. Correlation between Fund performance and index performance may be affected by Fund expenses and because the Fund may not be invested fully in the securities of the index or may hold securities not included in the index.
The Risk-Managed Income ETFs frequently may buy and sell portfolio securities and other assets to rebalance its exposure to various market sectors. Higher portfolio turnover may result in higher levels of transaction costs paid by the Risk-Managed Income ETFs and greater tax liabilities for shareholders. The Risk-Managed Income ETFs may concentrate on specific sectors or industries, subjecting them to greater volatility than that of other ETFs. The Risk-Managed Income ETFs may hold large positions in a small number of securities, and an increase or decrease in the value of such securities may have a disproportionate impact on the Funds’ value and total return. Although the Risk-Managed Income ETFs intend to invest in a variety of securities and instruments, the Risk-Managed Income ETFs will be considered non-diversified.
Additional risks include: Collared options strategy risk, correlation risk, derivatives risk, foreign investment risk, and industry concentration risk.
Dow Jones Industrial Average®: A price-weighted index composed of 30 “blue-chip” U.S. stocks. The index covers all industries except transportation and utilities, respectively. One cannot invest in an index.
The Dow Jones Industrial Average® is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”), and has been licensed for use by Nationwide Fund Advisors. Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones®, Dow Jones Industrial Average®, DJIA® and The Dow® are registered trademarks of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Nationwide Fund Advisors. The Nationwide Dow Jones® Risk-Managed Income ETF (“NDJI”) is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the Dow Jones Industrial Average®.
Nasdaq-100® Index: An unmanaged, market capitalization-weighted index of the 100 largest, most actively traded U.S companies listed on the Nasdaq stock exchange. The Index includes companies from various industries except for the financial industry, like commercial and investment banks. These non-financial sectors include retail, biotechnology, industrial, technology, health care, and others.
Nasdaq® and the Nasdaq-100® are registered trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the "Corporations") and are licensed for use by Nationwide Fund Advisors. The Nationwide Nasdaq-100® Risk-Managed Income ETF (“NUSI”) has not been passed on by the Corporations as to their legality or suitability. NUSI is not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT.
Russell 2000® Index: An unmanaged index that seeks to measure the performance of the small-cap segment of the U.S. equity universe.
FTSE Russell (“Russell”) is the Index Provider for the Russell 2000® Index (“Russell 2000®” or the “Index”). Russell is not affiliated with the Fund, Nationwide Fund Advisors, the Distributor nor any of their respective affiliates. Nationwide Fund Advisors has entered into a license agreement with Russell to use the Russell 2000®.
The Nationwide Russell 2000® Risk-Managed Income ETF (“NTKI”) has been developed solely by Nationwide Fund Advisors. NTKI is not in any way connected to nor sponsored, endorsed, sold, or promoted by the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies. All rights in the Russell 2000® vest in the relevant LSE Group company which owns the Index. “Russell®” is a trademark of the relevant LSE Group company and is used by any other LSE Group company under license. The Index is calculated by or on behalf of FTSE International Limited or its affiliate, agent, or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of reliance on or any error in the Index or (b) investment in or operation of NTKI. The LSE Group makes no claim, prediction, warranty nor representation either as to the results to be obtained from NTKI or the suitability of the Index for the purpose to which it is being put by Nationwide Fund Advisors.
S&P 500® Index: An unmanaged, market capitalization-weighted index of 500 stocks of leading large-cap U.S. companies in leading industries; gives a broad look at the U.S. equities market and those companies' stock price performance.
The S&P 500® index is a product of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”), and has been licensed for use by Nationwide Fund Advisors. Standard & Poor’s®, S&P®, and S&P 500® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Nationwide Fund Advisors. The Nationwide S&P 500® Risk-Managed Income ETF (“NSPI”) is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500® Index.
Nationwide Fund Advisors (NFA) is the registered investment advisor to Nationwide ETFs, which are distributed by Quasar Distributors LLC.
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