Investors from all walks of life need income for their portfolios. Whether dividends to reinvest or simply to pay the bills, current income can help investors across the board. This specific moment, however, has really contributed to the case for current income. Factors like macro uncertainty, high interest rates, and concentration risk speak to the merits of adding income to an overall portfolio.
See more: Active Income ETF GQI Rises Above $100 Million in AUM
What kind of strategies can offer that income? Dividends, of course, present one option, but many portfolios already include some amount of dividends. What’s more, your standard fixed income yields can help, but the lack of equity exposure can make a strategy less efficient overall.
A strategy like GQI, the Natixis Gateway Quality Income ETF, charging 34 basis points (bps), presents an alternative. GQI combines equity exposure and income. It uses a multifactor quantitative model to invest in large and mid-cap stocks, leaning on high-quality options. It invests in ELNS, or Equity-Linked Notes, which combine a steady return with potentially higher, equity-related upside.
Why look to an ETF like GQI right now for that added support? On top of its active ETF format, offering tax merits compared to a mutual fund, current income can help investors a lot right now.
Current Income and Concentration Risk
Many investors’ portfolios, like the market overall, rely on a handful of big names to provide returns—outsized returns, at that. With those firms relying heavily on the AI trend, if AI proves to be somewhat of a bubble, those firms could begin to disappoint. Steady inflows can buoy a portfolio in case of such a turn of events.
Higher for Longer?
High interest rates eat into many investors’ costs of living, whether through mortgage rates or borrowing. While higher rates can provide boons like better yields, their toll can wear down the economy.
Inflation
Finally, inflation continues to prove a sticky problem for investors. With housing continuing to plague overall pricing metrics, the cost of living has risen notably. For investors particularly nearing retirement, new money can really help them bear the load from those rising costs. GQI presents one option for those looking for steady funds coming in. Combining equity and fixed characteristics, it may be one to keep an eye on moving forward.
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